'Having a car loan works against you when applying for a home loan'
South Africa has decent roads but lacks good public transport infrastructure.
Many South Africans, therefore, choose to buy their own vehicle, usually financed with debt.
The pandemic has resulted in a marked increase in home loans while vehicle finance is in the doldrums.
Africa Melane asked financial planner Gerald Mwandiambira for advice on weighing up a car loan versus a home loan.
If you are thinking of buying a home, perhaps you should consider doing without a financed car, advises Mwandiambira.
The number one reason most people are declined when they apply for a home loan is that they’ve purchased a car… If you’ve taken out a car loan… it has a significant impact on affordability…Gerald Mwandiambira, Certified Financial Planner - Sugar Creek Wealth
A home is an appreciating asset… it’s a much more secure loan from the bank’s point of view. A car depreciates… Home loans are easier to apply for if you don’t have a car loan.Gerald Mwandiambira, Certified Financial Planner - Sugar Creek Wealth
Having a car loan will work against you when you apply for a home loan… If you’re wondering whether to buy a home or a car; definitely get a home loan first…Gerald Mwandiambira, Certified Financial Planner - Sugar Creek Wealth
Listen to the interview in the audio below.
This article first appeared on CapeTalk : 'Having a car loan works against you when applying for a home loan'
Source : https://www.123rf.com/photo_122935538_stylish-black-woman-in-a-car-salon.html?term=new%2Bcar&vti=md6vkvyys77us58582-1-1