Mortgage originators are people, or companies or institutions that organise a mortgage on behalf of a property buyer. This person or institution is usually a mortgage broker, a bank or a dedicated mortgage banker. The mortgage originator works with the buyer, otherwise known as the borrower, to secure the mortgage and guide the buyer through the process of concluding a mortgage deal. In simple terms, the mortgage originator acts on your behalf when you need to get a home loan.

In South Africa there are several kinds of mortgage originators and a number of different institutions that fulfill that role on behalf of the buyer, who acts as the client. In this country mortgages are more commonly known as bonds, so a mortgage originator is simply a person or institution that helps you to organise a bond so that you may buy a property. More often than not in South Africa, this will be your bank. Acting as a mortgage originator, your bank will make a loan to you in order that you may buy the property in question. The seller of the property is paid in full by the bank, and the bank grants you the loan in the form of a bond (or mortgage). You then pay the bank back in mutually agreed installments. This makes the bank the institution that is actually lending you the money – hence the term mortgage originator. In other words, the bank is the primary lender in this scenario.

Sometimes, and increasingly in South Africa, an intermediary will act as the mortgage originator. This role is one of a broker who sources the best value mortgage for you, and organises the whole process so that all you need to do is sign on the dotted line, as it were. This is similar to the traditional insurance industry model, where a broker will source an insurer for you, help you design your policy package and ensure that all the necessary paperwork is done, thus making the process simpler and less time consuming for you as a client.

One of the advantages in South Africa, and indeed across the world, of using a mortgage originator, is that this person or entity ideally does not favour any particular bank or financial institution – instead, the focus is on finding you the deal that works best for you.

Mortgage Plus will find the right deal for you. Guaranteed!

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

Question and Answers regarding Home Loans in SA

Q: I am in the process of buying a home and require a bond. My first thought was to apply directly with my bank, however a friend told me about something called Mortgage Origination. What is Mortgage Origination and why do I need a mortgage originator?

A: Mortgage origination is the business of negotiating a home loan with a bank on behalf of a prospective property owner. Mortgage originators give you independent advice on choosing a home loan and help you obtain it without the hassle of doing all the legwork yourself. Some originators, like Mortgage Plus, offer services that may help a buyer, like advice on estate agents in the area, how to complete the sale agreement, etc.

Because your home purchase is probably the most expensive one you’ll make in your life, the home loan itself is an important financial decision and the benefit to be gained from making the correct choice can amount to savings of hundreds of thousands of Rand over the life of the loan.

Q: I am confused. What is a Variable Rate Loan vs. a Fixed Rate loan?

A: With a variable rate loan, your interest rate is linked to the base home loan rate which moves up and down depending on market conditions. If the base rate decreases by one percent, so will your interest rate, and of course if the base rate increases so does your home loan rate.

With a Fixed Rate Loan however, your interest rate is fixed for a specified period, generally between one and two years and is generally slightly higher than the base home loan rate when the loan is taken out. A fixed rate loan protects you from rising interest rates and gives you the certainty of knowing exactly what your payments will be. Bear in mind however that it does not allow you to benefit from any decreases in the interest rate over the fixed period.

Q: My husband and I are expecting our third child so we are in the market to buy a new, bigger home but with the current interest rates and uncertainty in the property market at the moment, we really need sound advice on whether to buy a new home, build from scratch or renovate our existing home.

A: Whether you are buying an existing home, building a new one or renovating your current abode, taking the first steps towards home ownership is a daunting prospect. Take heart – no matter how intimidating that mountain may appear, scaling it will always be easier with sound advice.

Property’s primary law is position – the area in which the home is located and the market value of the homes within that suburb. Discussing the prospects with family and friends around the braai or the dinner table provides a valuable perspective on the intangible elements of local amenities, community living or double-storey homes when there is a new baby in the crib.

Building and renovating carries the guiding principle – do not over-capitalise the property relative to the neighbours. Simply put: building or extending the property into a five-bedroom mansion with an Olympic-size swimming pool in an area where the bulk of properties have three bedrooms on small plots is not economically sensible.

Conversely, renovating the smallest property in a prime area promises a long-term return that more than compensates for the renovation costs. Essentially, bathrooms and kitchens sell properties so upgrading those assets substantially improves the home value.

There is no substitute for professional advice. Mortgage Plus  is one of the country’s top mortgage originators and offers free advice to home owners and buyers. Whether buying, renovating or building, our consultants can guide you through the process step-by-step, complete the paperwork and arrange and negotiate with the banks a finance package to suit your individual needs.

By choosing Mortgage Plus for a loan, you will get professional advice 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