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Although right now may be the best of times to purchase property, it certainly is not the easiest of times to secure a bond. During times like these an experienced bond originator could save the day.
The banks have become increasingly skittish about extending credit to consumers. And this includes ‘traditionally safe’ forms of credit, such as home loans.
The three main instigators that are party to the banks’ growing uneasiness about the mortgage market are: the household debt to personal disposable income ratio; the poor growth in house prices; and the National Credit Act.
1· Household debt to disposable income increased. In effect, this means that many households are either over indebted at present or finding themselves very close to that unwelcome position.
2· The National Credit Act placed the over indebtedness monkey squarely on the backs of the banks. If a bank extends credit that directly results in a consumer becoming over indebted, the bank can be sued for what the Act terms ‘reckless lending’ by the affected consumer. The checks and balances to ensure that this is avoided, are stringent and contributed to 50% of the home loan applications lodged being rejected.
3· To exacerbate matters, the property market has not been performing well of late. Some areas have even started showing negative growth (in real terms)., This means that the properties in those areas may no longer serve as sufficient collateral to cover the loans originally extended to the property owners. In response, three of the big banks have changed their Loan to Value guideline percentages, making it very difficult to obtain a 100% home loan.
Given the above, you would do well to secure the services of an experienced bond originator. It will help you to better stack the odds in your favour:
Bond originators typically have a banking background. This means that they have a good end-to-end understanding of the evaluation and approval processes followed by the banks’ mortgage departments. They usually know who is who in the banks that they represent, which could sometimes come in handy.
Bond originators can help you pre-assess whether you are likely to qualify for a home loan and calculate the maximum amount you will be able to apply for. To do this, your bond originator will probably ask you to provide some personal details, employment information, a list of your assets and liabilities and a list of your monthly income and expenses. If you are comfortable with providing your bond originator with a copy of your credit report, it will help them make an even more accurate assessment of your situation.
Bond originators work with multiple banks. Once you have found a home you would like to buy, the bond originator will lodge the necessary paperwork (application and supporting documentation) with all those banks that are likely to approve your application.
Bond originators tend to secure the best interest rates. When dealing with banks as an individual, you are less likely to achieve the same discounts as a bond originator typically would. Realising that your bond originator will have approached multiple banks, the banks usually give the best discount possible for your profile fro the outset.
Bond Originators remain involved until all the paperwork is done. Instead of leaving you to your own devices once you crack the nod from one of the banks, the bond originator will continue assisting you until the deal is legally and officially done.
Bond originators’ services are free. You do not pay for your bond originator’s services, the bank does.
To conclude
The services of an experienced bond originator in times like these are essential. They understand the current dynamics of the banking industry; they know how to navigate their way through the application processes; and they are fully aware of what is needed to ensure that your application is successful in the end.
By choosing Mortgage Plus for a loan, you will get that continual service to make sure you are getting the best deal possible.
CONTACT US
Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.
Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za
www.mortgagepluscc.co.za
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