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5.1 Name TWO types of insurance that could be included in the monthly repayments of a home loan - NSC Consumer Studies - Question 5 - 2019 - Paper 1
Question 5
5.1 Name TWO types of insurance that could be included in the monthly repayments of a home loan. 5.2 Name TWO service connection fees that are payable to the munici... show full transcript
Worked Solution & Example Answer:5.1 Name TWO types of insurance that could be included in the monthly repayments of a home loan - NSC Consumer Studies - Question 5 - 2019 - Paper 1
Step 1
5.6 Explain if Taylor is likely to get a government housing subsidy.
Answer
Taylor is likely to qualify for a government housing subsidy as she meets the following qualifying criteria:
- Age Requirement: She is older than 21 years.
- Citizenship: Taylor is a South African citizen.
- Financial Assessment: She earns monthly income of R3 300.00, which is within the limits set for subsidy applicants.
- Property Ownership: Taylor is a first-time property owner, which often makes her eligible for such subsidies.
Step 2
Step 3
5.7.2 Name THREE disadvantages of living in the property described in the advertisement above.
Answer
- Shared Common Areas: The occupant must share the common areas with others, which may lead to disputes over the use of those areas.
- Limited Outside Space: The outside space is restricted and typically must be shared with others, reducing privacy.
- Body Corporate Regulations: The resident must abide by the body corporate's rules, which may limit personal freedom and changes that can be made to the property.
Step 4
5.7.3 Discuss the financial responsibilities and financial implications for the new owner if he/she buys this property with a 100% bond, with the intention of renting it out.
Answer
- Bond Repayment: The new owner will be responsible for paying the bond along with other levies and taxes, including homeowner's insurance and potential maintenance costs.
- Income Generation: Although rental income may start at a lower rate, it could increase over time, impacting the overall financial scenario related to bond costs.
- Investment Returns: The owner should analyze the potential return on investment based on the rental market dynamics, as this can influence the viability of renting the property.
Step 5
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Step 7
5.9 Predict, with valid reasons, what influence rising interest rates may have on the property market when buying and renting.
Answer
- Affordability Issues: Higher interest rates lead to increased monthly bond repayments, making homeownership less affordable for potential buyers, thus slowing down sales.
- Higher Rental Demand: As fewer people can afford to buy property, they may turn to renting as an alternative, inflating rental prices due to increased demand.
- Market Dynamics: If bond repayments increase significantly, it could deter new investments in property, leading to stagnation in the market.