Utilizing the reserved home mortgage funds for setting aside resources for future aspirations or unforeseen hardships
In South Africa, First National Bank (FNB) is encouraging homeowners to consider their home loan access funds facility as a strategic tool for saving, managing household budgets, and pursuing long-term financial goals. This facility offers a unique opportunity to leverage the home loan for multiple purposes beyond just paying monthly bond repayments.
Strategic Uses of the Home Loan Access Funds Facility
By using the access funds facility, homeowners can tap into their bond-linked credit line, which generally has lower interest rates compared to unsecured debt. This can help save money on interest by consolidating costly debts into the home loan. The facility also offers flexibility to manage cash flow and household budgets by allowing short-term access to funds when needed, such as during unforeseen expenses or to cover gaps without resorting to costly personal loans or credit cards.
For long-term financial goals, using this facility to renovate or improve the home can increase the property’s market value, serving as a form of investment. Furthermore, committing some funds towards education or other future plans helps in building assets or skills that enhance one’s financial position over time.
Nav" Home: Aligning Home Loans with Financial Goals
FNB's nav" Home tool, available on the FNB Banking App, supports customers in aligning their home loan with their overall financial goals. By using this tool, homeowners can gain control over both short and long-term property decisions.
Nav" Home helps customers make informed and timely decisions about their property, such as renovations, solar installations, or understanding equity. It provides customers with detailed bond information, live property valuations, and access to 5-star rated home service providers.
Using the nav" Home tool, customers can weigh the benefits and drawbacks of accessing funds versus preserving value for the future. It gives customers a clear view of their property's current value, repayment progress, and potential justifications for withdrawing funds.
Financial Responsibility and Intentional Management
The use of these funds should always be aligned with a bigger financial plan. Consistently paying more than the minimum bond repayment can strengthen financial resilience by increasing access to funds over time and creating a buffer for unexpected events.
Mfundo Mabaso, the Product Head of FNB Home and Secured Lending, emphasizes that treating a home as a dynamic part of a financial plan leads to more intentional management of the asset, helping to grow and retain wealth. Jolandé Duvenage, the Chief Imagineer for nav" at FNB, shares this sentiment, stating that the use of the access funds facility requires intention and alignment with a bigger financial plan.
In volatile economic times, a home loan can become an incredibly useful tool to support a broader financial plan. By leveraging the home loan access funds facility strategically, homeowners can unlock additional funds they've paid over and above their minimum monthly repayments. These additional funds can be reallocated to pressing needs, long-term ambitions, bridging short-term expenses, consolidating higher-interest debt, renovating a house, funding further education, or starting a side hustle.
In summary, FNB’s home loan access funds facility serves as a versatile financial tool for South African homeowners to save interest, manage cash flow effectively, and invest in value-adding or future-oriented expenditures, aligning closely with household budgeting and long-term financial planning goals.
- By utilizing the home loan access funds facility, homeowners can consolidate costly debts into their home loan, thus saving money on interest and lowering their overall personal-finance expenses.
- For long-term financial goals, homeowners can invest in the property itself through renovations or improvements, increasing its market value or using the funds for education or future plans, building assets and skills for a better financial future.
- FNB's nav" Home tool aids homeowners in aligning their home loan with their overall financial goals, allowing for informed decisions about short- and long-term property choices, and considering the benefits and drawbacks of accessing funds versus preserving value for the future.
