Do you know that in a 20-year bond, you pay off your principal loan in 9 years?

When most people get their first bond, they are so excited about the easy repayment terms that they forget that they have to pay the same amount every month for 20 years, making a total of 240 months.

But more importantly they do not realise that in those 20 years they will pay more than double the bond they obtain.

Some might even experience hard times like when they lose their jobs and end up losing their homes when they fail to repay their bonds.

What most people are not aware of is that if you lose your house after nine years, you have practically paid off your principal loan. But you still owe the bank the interest.

Yes, that’s a fact. In a 20-year bond, your interest alone is the equivalent of years’ repayments.

But you can save thousands and even millions by simply paying a little extra each month, without even stretching your budget.

That little extra can save your home from repossession when you fall into hard times as it can act as an advance payment, but more importantly it will allow you to pay off your bond in a much shorter period saving up to half the interest if you maintain the payments.

It is really that simple and our book: How to buy a house for half the price shows you these easy steps and how you can really pay half the total amount that you were required to pay.

This is what Phindile Kunene, editor of the COSATU magazine, Shop Steward, said in her review the book:  "How to buy a house for half the price is a must read for all South Africans, especially those who fall outside the state low cost housing subsidy net. It is an important and timely book given the demand for housing amongst young black South Africans who either resort to buying homes through finance capital or to renting town house complexes in the country's suburbs.

"This book is an empowering tool for those currently facing the might of finance capital. It can teach you how to play the game to your benefit; how to beat the banks at their own game and how to maximise the gains out of a situation that is not designed to favour you. This alone, makes the book a good read."

The book is available from Amazon as a kindle book which you can download onto your computer or smartphone or as a hard copy from Kalahari.

Did you know that more black South African women own homes than men?

Surprise! Surprise! South Africa’s black women own more houses than their male counterparts according to the latest General Household Survey by Statistics South Africa. And they are the only racial group who beat their male folks. Coloured, Asian and white women are all beaten hands down

Stats SA says some 3.6 million black women owned homes that were fully paid-up last year while only 3.4 million black men owned fully paid-up homes. Blacks owned 7 million of the 8.3 million homes that were paid-up in South Africa.

Women in other races trailed way behind their men. Among Coloureds, 221 000 women owned fully-paid homes against 273 000 men. The gap for Asians, including Indians, was even wider. Only 53 000 woken owned fully-paid homes compared to 108 000 men. Whites fared worst with only 201 000 women owning fully-paid up homes, less than half of the 437 000 men.

But men who owned homes but were still paying for them outnumbered women across all racial groups.

Black men more than doubled their female counterparts with 339 000 men against 140 000 women. For Coloureds it was 134 000 men against 42 000 women, and 55 000 Asian men against 12 000 women. The gap for whites was even wider with 341 000 men against 77 000 women.

*If you are buying a house or intend to buy one, our book gives you advice on how to quickly pay off your house and still pay half the price. It is available as a kindle book from Amazon and a printed version from Kalahari.

Is the number of South Africans living in their own homes declining?

The general household survey conducted by Statistics South Africa which was released this month shows that the number of South Africans living in their own homes which they have fully paid for has declined from a peak of 61.4 percent in 2008 to 54.9 percent last year.

The figures do not show whether people are losing their homes or whether there has been an increase in the number of households with most not owning their homes.

The survey says in 2002, only 52.9 percent of South African lived in their own fully-paid homes. This figure increased peaking at 61.4 percent in 2008 but declined to 53.5 percent in 2011 before increasing again to 54.5 percent in 2012 and 54.9 percent last year.

The survey showed that there were 15.1 million households in South Africa last year and 8.3 million owned homes that were fully paid for. Some 3.2 million were renting, while 1.9 million were living in rent free homes. Another 1.4 million owned their homes but were still paying for them.

While the majority of South African households are living in homes that have been fully paid for, figures from the National Credit Regulator show that there are 20.64 million credit-active consumers and just over half are in good standing.

The latest figures are for December last year and they show that only 10.71 million consumers were in good standing. A staggering 9.93 million had impaired records with 2.6 million having judgments and administration orders pending.

SA consumers to be hard pressed

South African consumers are likely to continue experiencing financial strain in the wake of a poorly performing economy, low employment and real income growth, one of the country’s leading banks ABSA says in its latest Housing Price Indices report.

The economy contracted by 0.6 percent in the first quarter. Barclays, the parent company of ABSA,  says growth for this year will only be 1.4 percent. The Reserve Bank says it will be 2 percent.

For those who can raise the cash, this is the ideal time to buy property because the housing market has been stable with average price growth of between 8 and 9 percent during the past nine months.

But upward pressure on inflation and an expected further hike in interest rates will affect consumers’ spending power and impact credit accessibility, affordability and demand.

Average prices for homes in May were:

• Small homes (80m²-140m²): R837 200
• Medium-sized homes (141m²-220 m²): R1 146 800
• Large homes (221m²-400m²): R1 780 200

 Consumer price inflation averaged 6% year-on-year in the first four months of the year, and is forecast to remain above this level for the rest of the year.

Interest rates are expected to be hiked by another 50 basis points in September, which will bring prime lending and variable mortgage interest rates to a level of 9.5% per annum by year-end.

*Our book offers valuable advice on how to save on your bond and is available here for instant download to your computer or smartphone.

Seven steps to get out of debt

Debt is addictive. And when you are in debt, you might not realise how deep you are unless you are totally overwhelmed and everyone is after your neck. Otherwise, you will keep on thinking, I will resolve this next month, and next month becomes next month.

Debt counsellor Anton van de Venter says it is easy to get out of debt.  He has prescribed seven  easy steps.

Step 1

Act Now – talk to someone you can trust, be honest and tell them everything, this should probably be a debt counsellor but a knowledgeable friend or business colleague may also do.

Step 2

“It’s not how much money you make (or spend); it’s how much you can keep.” says Robert Kiyosaki of, “Rich Dad, Poor Dad” fame. Often poor people do not carry happiness within themselves and depend on external sources for their happiness, buying to impress makes them feel good. Rule No. 1 – If you don’t need it to survive DO NOT BUY IT. (to survive is very different to, “nice to have”)

Step 3

Credit cards are the enemy – cut them up, lock them in a safe or give them to a trustworthy person – CARRY a DEBIT CARD. Now you can only spend money you have. If you run out – GO HUNGRY, most people eat too much anyway.

Step 4

Budget, budget, budget – talk to your family, get everyone on the same page, make SERIOUS cuts to your budget and stick to them. Turn off DSTV, no more maid, cut your own grass, stop eating meat, stop smoking – get your children involved, you will be surprised how understanding and willing they are to help. Remember you are a family, they love you for you not for the TV!

Step 5

Call your creditors and discuss your situation with them, make arrangements, do not let debit orders fail, this just costs money. Nearly ALL creditors will assist you, BUT you need to be persistent and give them honest and accurate information. Do not accept no for an answer, if they really can’t help you then speak to a Debt Counsellor, remember the National Credit Act can protect you in spite of what the credit provider will tell you.

Step 6

Be patient, getting rid of all the debt that you’ve accumulated over the last 10 or 15 years can be a very slow process so don’t be discouraged, it’s a process.

Step 7

Do not carry extra cash in your wallet, do not visit shopping malls – spend spare time outdoors with your children. Shopping centres are much better at convincing you to spend money than you think – they are experts at getting you to part with your money.

Can you swallow this? You have to if you want to get out of debt and start saving.

This except was reproduced with permission of the author for our book: How to buy a house for half the price.