What is Home Loan or Bond Switching?

The South African property market has become extremely competitive as the financial institutions fight for market share. So, you, as the consumer can benefit from this. Switching simply means to moving your home loan from one financial institution to another.

Why would you do it?

Well the answer is simple: To get a better interest rate on your home loan. A reduction of merely 0.5% on your interest rate could save you thousands of Rands in the long run. Another reason to switch is that not only has another financial institution given you a better rate but they may have also offered you additional lending against your property.

The Costs of Switching.

The two points mentioned above makes it look very attractive to move your home loan, but you must be mindful of certain costs involved. Your current financial institution, more than likely, has penalty clauses written into your initial home loan agreement, which means you may end up paying 90 days’ penalty interest on your home loan if you cancel, which could amount to quiet a hefty amount.

Who is going to pay the attorneys fees and other registration costs to register your new home loan and what about the bond cancellation costs of your existing home loan? There are also valuation fees and initial administrative fees to be paid on the registration of a new bond!

With all this in mind it could still be a worth while exercise to move your bond, though. Due to the competitive nature of the market some financial institutions are prepared to waive valuation and administrative fees as well as pay for (or a portion of) the registration and cancellation costs involved.

How do you get around the 90 days penalty fee?

It is advisable to contact your financial institution to discuss this. Most financial institutions accept a 90 days notice period of your intention to cancel your home loan.

If you decide to switch your home loan you will need to provide the new financial institution with copies of your pay slip, bank statements, IDs and all the necessary documents required to prove affordability.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

A Bond Originator Works As A Mortgage Negotiator Between You And The Bank

Everyone dreams of buying a home and typically will save for a while in order to secure a down payment. Traditionally once you are ready to purchase your first home you will approach a financial institution for a mortgage. Then you would wait to hear if you have been approved for a mortgage. Things are not necessarily that easy anymore, banks are becoming more difficult to secure a loan from and there are many different banks offering various mortgages rates. The whole process can be confusing; this is why a Bond originator can be helpful.

Bond originators provide a service to you in applying for a mortgage. It is their job to assist you with the process of securing a home loan and get you the best possible rate. A Bond originator actually simplifies the process by acting as the liaison between you and the financial institutions.

Agencies that act as Bond originator’s work for you but get paid by the bank. Their services are free to you the applicant and you never pay them any money. The way they get paid is through the bank when a bond for a new home has been granted.

The originator works directly with you, the applicant, and handles all the leg work associated with securing a bond. These professionals deal with financial institutions on a regular basis. They are educated in all the options that may be available to you the loan applicant.

Since they deal with the banks on a regular basis they have the power of the negotiator and therefore provide you with leverage that you as an individual would not have. Consequently the banks are more willing to work with them since they represent more than just your mortgage. They basically have the advantage of being more than just a single person dealing with the bank.

This leverage can be utilized to provide you with a loan that has a better rate and perhaps shorter-term than you would have qualified had you not used their service. Utilizing an originator to secure your mortgage is a hassle free way of securing a loan and assuring yourself that the terms are the best possible. These professionals can evaluate your financial situation and determine what you may qualify for and what they feel they can pitch to the bank.

Bond originators are becoming the most popular method of applying for a loan for a new home. It is believed that this will eventually be the only way to apply for a mortgage. Under tough economic conditions banks become more and more selective and provide mortgages only to the absolute best applicants. This does not mean that a home loan is out of reach of the average person. But rather that the bank needs more evidence of your ability to pay. The bank originator will convince the bank that you are a viable candidate for a mortgage. If they don’t secure your mortgage they don’t get paid. These are the reasons why you should seriously consider using a Bond originator when you get ready to buy a new home.

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