Prospective homeowners should explore their options prior to signing on the dotted line of a mortgage agreement. Probably the most critical thing to know and understand when acquiring a Home loan is to know what the various terms mean. This can be accomplished easily by asking a lot of questions and asking your estate agent to explain everything to you. Plus, some online browsing can turn up the answers to most of the questions that you might have.It’s important to look at the different types of Home loans that are available and to understand the differences among them. From a fixed rate, to a variable rate, to an interest only mortgage, the choices are many and the difference between them is big. If you don’t understand what a particular type of mortgage loan means in terms of monthly payments, as well as the duration of the payments, then you shouldn’t be signing on the dotted line.

Potential buyers should also understand the various terms or words that are employed when dealing with real estate.

If the mortgage loan that you are getting is a first time home loan, then it is the primary loan and the primary lien holder. This means that the lender of this specific loan holds the first claim against the property for repayment of the loan holder’s debt.

Home loans can be obtained at banks or with the help of a mortgage broker. Each lender assesses their own schedule of fees, offers their own range of interest rates, and their own selection of Home loan packages.

In order to qualify for a home loan, potential borrowers will need to go through a pre-qualification screening. During this stage, each borrower is expected to bring a number of financial documents to verify their information. Once they pass that stage, they will continue with the application process. Additional paperwork is completed and processed.

In order to receive approval for a home loan, the potential borrower needs to provide the following pieces of information: terms of employment, income level, level of debt, age of the applicants, and the type of home that is the intended object of purchase. Plus, the current interest rate and the size of the deposit can all influence whether or not the potential borrower is approved for the loan. The valuation of the home will also come into play as well.

When buying a home, it’s important not to bite off more than you can chew. If a homeowner fails to pay on his home loan, the lender can repossess the home and the homeowner is left with nothing, except maybe bad credit.

To apply for a loan you will have to fill out a short application form. You will then receive a FREE quote from well established, nationally recognized lenders. You do not need to decide now whether the loan is for you.

Just apply and compare the repayments to your current situation. There is no obligation on your part. If you decide that it is not for you, you simply do not have to accept the offer. You have nothing to lose and everything to gain.

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011.327.4489 morne@mortgagepluscc.co.za

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The word “home loan” or “mortgage” have exactly the same meaning. Since most of us do not have enough money to pay cash for a home, we need to apply for a home loan or mortgage from a bank to assist us with the purchase

If you found the home of your dreams and the bank grants you a home loan then your bank will pay the owner of that property. Thereafter you will have to start to making monthly repayments to pay off the debt you now have

Although the definition of a home loan is straightforward, the actual process is very detailed in nature. Here are some basics about home loans that you should know.

Home loan amortization

Amortization is a term used to describe the payment of a homeloan through a schedule of systematic payments. You will have to keep up with your monthly payments to the bank until your home loan is paid in full.

Your monthly payments are made up of principle (the original loan amount) and interest payments. A loan amortization schedule shows the allocation of each loan payment to interest and principle

Loan Term

Your loan term is the amount of time it takes you to pay off your loan. The loan term can vary from 5-30 years, although most people in South Africa, prefer a 20 year loan term.

The longer you take to pay off your loan the lower your monthly repayments will be, but at the same time the interest that you will be paying will be much higher.

Types of Mortgages

The most common ones in South Africa are the fixed, variable rate mortgage as well as, more recently, the interest only mortgage.

A fixed rate mortgage means that your repayments remain the same over a certain period. The only increase that you can expect is the result of increases in insurance rates and property taxes.

With a variable rate mortgage your monthly repayments will fluctuate. If interest rates are going down your monthly repayments will decrease, but should rates go up your payment will increase accordingly.

With an interest only mortgage you only pay off the interest on your loan and delay the repayment of the principle debt. However, you will have to settle the debt eventually by either restructuring your payments or by selling your home.

Financial Calculators
If you are comparing either a fixed, variable or interest only mortgage home loan, then you could use one of our financial calculators to help you decide.

You should now have a much better understanding of what a home loan or alternatively a mortgage is.

For a more detailed discussion on various subjects you can call us on (011)327-4489 or go to www.mortgagepluscc.co.za