x

Money Matters

www.bankwindhoek.com.na

Special Edition

Guide to home ownership

Bw

11/

324

Every family requires a secure place of living which they can call home.

For many of us one of the biggest purchase transactions one would conclude in a lifetime would be to acquire your own home. The benefit of owning your own home may be that you will have a secure place for you and your family and that nobody can remove you from your property, provided that you meet all your commitments regarding your property.

You need to establish what your family’s accommodation requirements are before you select a property. Should you plan to extend your family, consideration should be given to extension possibilities within affordability limits.

The purchase price of a property is normally financed by a bank on application for a home loan. The property purchased serves as security for the loan and the bank registers a mortgage bond at the Deeds Office against such property to endorse the property as security. The mortgage bond is registered following the transfer of the property into the name of the purchaser. The proceeds of the loan can only be disbursed after such a bond registration.

There are two types of home loans, namely a loan on an existing property called an ordinary loan, and a loan known as a building loan which is on a property still to be built. In the case of an ordinary loan, the full purchase price is paid on date of transfer and bond registration, where after the monthly repayments commence. Whilst on a building loan, the cost of the land (erf) is paid on date of transfer and bond registration, and the cost of construction is paid in intervals as the construction work progresses. Normally repayments commence once 50% of the proceeds of the loan is paid out, in order to counter interest charges absorbing the available loan balance.

There are various costs involved in transferring the property into your own name as well as registering a mortgage bond.

The biggest portion of these costs relates to transfer duty and stamp duty payable to the Ministry of Finance. However, transfer duty is only applicable when the purchase price of the property exceeds N$400 000.

These costs can be added to the loan amount, provided the valuation of the property can accommodate the loan amount as well as the total costs. Otherwise the purchaser needs to contribute a portion thereof out of own funds.

The average costs for loans up to N$1 million is about 5% of the loan amount, 6% for loans up to N$1,5 million and 7% for loans up to N$2 million.

introduCtion

ACCommodAtion reQuirements

FinAnCinG the purChAse priCe

tYpes oF home LoAns

Costs inVoLVed when purChAsinG A propertY

A subsidiary of Bank Windhoek Holdings Limited

x

Money Matters

www.bankwindhoek.com.na

Special Edition

Your monthly loan instalment is calculated according to the interest rate and repayment term of your loan, including provision for insurance and assurance premiums.Repayment terms are normally 20 years, depending on your age and remaining period until retirement. Should you retire within the next 15 years, your repayment term will only be 15 years.The interest rate on home loans may vary between 10,75% and 11,25% depending on your employment benefits.The factors used to calculate your monthly home loan instalment per N$1 000 loan amount is as follows:

method:Say for instance you applied for a loan of N$165 000 over a period of 15 years at an interest rate of 11,25%, you multiply the factor of 11,52 by 165 ( being the number of N$1 000’s in the loan amount) and you get to an amount of N$1856.25 representing your basic monthly instalment.

Provision for insurance premiums can be added to this basic instalment by dividing your annual insurance premium by 12 to get to a monthly contribution. The basic instalment needs to be adjusted accordingly.

In some instances you may be in the fortunate position that your employer is supporting you to obtain a home by entering into a housing scheme with the bank. You may receive a monthly allowance or subsidy to assist you in affording the monthly loan instalment. Such subsidy / housing allowance is set off against your monthly loan instalment, reducing your own contribution and as such allowing you to afford a bigger home loan on a better property.

CALCuLAtinG Your monthLY instALment

AFFordABiLitY

inCome & eXpenditure stAtement

term in YeArs interest rAte FACtor10 10.75% 13.63 15 10.75% 11.2120 10.75% 10.1510 11.25% 13.9215 11.25% 11.5220 11.25% 10.49

inCome & eXpenditure stAtement continued on next page...

A subsidiary of Bank Windhoek Holdings Limited

Proof of income is required.

To enjoy the benefit of owning your own home, you need to ensure that the cost of your home is not putting financial strain on you and your family.

To avoid this, is of utmost importance. That is why you should do proper financial planning and budgeting by compiling a monthly income and expenditure summary.

A draft summary is reflected for your convenience and can be adapted to represent your situation. It will be to your own benefit to compile it as comprehensive as possible, otherwise you may struggle to afford the monthly installment.

inCome

Own nett income Basic – N$ N$

Spouse nett income N$

Other income N$

Commission N$

Rent N$

Total income N$

x

Money Matters

www.bankwindhoek.com.na

Special Edition

inCome & eXpenditure stAtement continued from previous page...

Your monthly surplus should exceed N$1 000.00 in order to provide for unforeseen expenses possibly caused by breakages or accidental damages.

eXpenditure

details Current payment

Bond payment

Body Corporate levy

Rent payment

Personal loan

Personal loan (Spouse)

Car payment

Car payment (Spouse)

Short term insurance premium

Life & other policies premiums

Credit card payment

Petrol & maintenance

Child / Wife maintenance

Clothing accounts

Water & lights

Rates & taxes

Telephone accounts

Cell phone accounts

M-Net & or DStv

Domestic salary

Groceries, meat etc

Savings & investment

Spending money

Bank charges

Other

Total expenditure N$

Total Surplus / shortfall N$

A subsidiary of Bank Windhoek Holdings Limited

x

Money Matters

www.bankwindhoek.com.na

Special Edition

responsiBiLities Homeownership requires various responsibilities, namely honouring monthly commitments, arranging insurance and assurance, proper maintenance etc.

monthly commitments: Monthly commitments include the payment of your loan installment to the bank, the payment of rate and taxes, electricity and water usage to the Local Authority, the payment of insurance and assurance premiums, as well as the cost of maintaining your property on a regular basis.

insurance:The financial institution financing the purchase of your property take the property as security for the loan, and therefore it is required that the property (the security) is protected against fire and other possible damages caused by accident, rain, water, flooding etc. Such insurance is utilised to repair and reinstate the property in the same condition as it was before the damage. Refer to the conditions contained in the policy.The insurance premium can be added to your loan and recovered from you by means of an increased monthly loan instalment.

Assurance:Assurance represents a life insurance policy on your life for the value of the loan amount. In the unfortunate event of your death, the proceeds of the life assurance will be utilised to repay your outstanding loan balance, leaving your loved ones (your family) with an unencumbered home to live in, without the burden of monthly repayments.The life insurance premium can either be paid by yourself or added to your loan account and recovered from you on a monthly basis by means of an increased monthly instalment.

maintenance:As a homeowner, you are responsible to keep your property in a good condition by repairing small ‘breakages’ as they occur, such as leaking water taps, running toilet cisterns, blocked gutters, roof nails are sealed and secured on a regular basis to avoid roof leaks, foundations are protected from being exposed by wind or rain, cleaning of carpets, periodic repainting, replacing broken window panes, fixing loose cupboard doors, installing security systems etc.The proper maintenance of your property is one of the main contributors to the value of your property.A well maintained property is not only an appreciated asset, but also a pride to you and your family.

Homeownership is a comprehensive issue. That is why homeowners should take the necessary precautions to protect and maintain their own property, and in doing so, build up a valuable asset for many years to come.

Should you require any additional information, you are welcome to call any of our branches countrywide, who will gladly assist you.

ConCLusion

ContACt us todAY:

“toGether we do Better”

Namib BouP.O.Box 6102AusspannplatzWindhoekNAMIBIA

Ludwig KleinTel: (061) 299 0546Fax: (061) 299 0595Email: kleinl@bankwindhoek.com.naWebsite: www.cih.com.na

A subsidiary of Bank Windhoek Holdings Limited

(STREET) 20m

New house

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EXTENSION 18

EXTENSION 20

EXTENSION 17

EXTENSION 19

(STREET) 12m

REM/PTN A (STREET) 20m

(STREET) 25m

(STREET) 15m

(STR

EET)

15m

(STR

EET)

15m

(STREET) 12m

(STREET) 12m

(STREET) 12m

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(STR

EET)

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(STREET) 15m

(STREET) 12m (STR

EET)

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(STR

EET)

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(STR

EET)

12m

(STREET) 20m

(STR

EET)

25m

(STREET) 12m

(STREET) 15m

DISCLAIMER: THE PROJECTED FLOODLINE

AS INDICATED ON THIS DRAWING SHOWS

THE HIGHEST WATER LEVEL UPON

STORMWATER MITIGATION MEASURES AS

COMPLETION OF BULK EARTHWORKS AND

PROPOSED BY LITHON PROJECT CONSULTANTS

REMAINDER OF THE FARM

NDANGWA TOWN AND TOWNLANDS NO.882

148

P.O.S

PHASE 1

EXISTING HOMESTEAD

WATER PIPELINE

TELEPHONE LINE

EXTENSION BOUNDARY

0

1

0

0

0

142

SPACE

RESIDENTIAL

PUBLIC OPEN

CIVIC

INSTITUTIONAL

BUSINESS

GENERAL

RESIDENTIAL

LEGEND: PHASE 1

IN ASSOCIATION WITH:

ONDANGWA TOWN COUNCIL

ON BEHALF OF:

SEPT 2011

CLIENT:

DESIGN:

624/NAMIB NOU/Phase 1_Amend_Sept11

SRM: ROOT DIRECTORY/ SUB DIRECTORY/ DRAWING NAME

UPDATED:

DRAWING NUMBER

624/ONDANGWA/Phase 1

SCALE

1 : 5 000

DRAWN: URBAN DYNAMICS

ORIGIN OFFSET

COLOUR PALETTE

DATE

DATE SEPT 2011

Notes:

45 NELSON MANDELA AVENUE

The copyright of this drawing is reserved

Namibia E-mail: info@udanam.comWINDHOEK Telefax :+264-61-240309P O BOX 20837 Telephone :+264-61-240300

KLEIN WINDHOEK, NAMIBIA

SURVEY:

PREPARED BY:

ONDANGWA

PROPOSED PHASE 1:

PROJECTED FLOODLINE

PHASE 1 BOUNDARY

MOVEMENT

CEMETERY 0

EXTENSION 17

Hs 15

Hs 19

Hs 21 Hs 20

Hs 18

REM

/PTN

A (S

TREE

T) 25

m

(STREET) 15m

(STREET) 20m

P.S

CHURCH P.O.S

PHASE 1

1

2

3

4 5

6

78

910

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EXTENSION 17

(STREET) 12m

(STREET) 12m

(STREET) 12m

(STREET) 12m

(STR

EET)

25m

ONSULTANTS

EXISTING HOMESTEAD

WATER PIPELINE

TELEPHONE LINE

PORTION BOUNDARY

LEGEND: TOTAL AREA

IN ASSOCIATION WITH:

ONDANGWA TOWN COUNCIL

ON BEHALF OF:

JULY 2010

CLIENT:

DESIGN:

624/NAMIB NOU/DRAWINGS/LAYOUT_AUG/LAYOUT_TB_Final

SRM: ROOT DIRECTORY/ SUB DIRECTORY/ DRAWING NAME

UPDATED:

DRAWING NUMBER624/ONDANGWA/EXT.17

SCALE

1 : 800

DRAWN: URBAN DYNAMICS

ORIGIN OFFSET

COLOUR PALETTE

DATE

DATE JULY 2010

Notes:

45 NELSON MANDELA AVENUE

The copyright of this drawing is reserved

Namibia E-mail: uda@uda.com.naWINDHOEK Telefax :+264-61-240309P O BOX 20837 Telephone :+264-61-240300

KLEIN WINDHOEK, NAMIBIA

SURVEY:

PREPARED BY:

ONDANGWA

PROPOSED PHASE:1EXTENSION 17

PROJECTED FLOODLINES

PHASE 1 BOUNDARY

CIVIC USE

PLEASE NOTE:

HOMESTEAD 21 OPTED TO BE RELOCATEDAND WAS NOT ACCOMMODATED IN LAYOUT