Mortgage Plus Bond Originators – Buying A Home

So, you’re in the market for a new home. It’s an exciting step and there is nothing like a brand new space to call your own. Before your search begins, Mortgage Plus Bond Originators would like to ensure that your journey to home ownership is a smooth one.

Here are some guidelines to help you every step of the way.

Step One: Know what you want

• Do some house hunting homework first!
• Know what size suits your needs and consider your choice of area. Think about accessibility to work, public transport, schooling and other amenities.Remember location really matters!

Step Two: Do your sums

Know exactly how much you can afford. It is not just the installment you will be paying – you need to include insurance (homeowners, household and life) and municipal costs in your budget. Use our Monthly Repayment Calculator to see how much you will need on a monthly basis, to cover the bond. After that, you need to add the additional costs to this figure.

Step Three: Banking on a budget

Now is the time to approach a Mortgage Plus Bond Originator consultant. You can give us a call on 0861 1111 93 or go online  at www.mortgagepluscc.co.za to do an affordability assessment to find out exactly how much credit you can access for your new home.

Step Four: Putting down a deposit

You may need to put some of your own money on the table before you can buy a house. Depending on your financial situation, some of our home loan products allow you to qualify for larger home loans without paying a deposit.

Step Five: The Right Package

Mortgage Plus offers a wide range of financial products to meet your individual requirements. It is important to choose a Home Loan package that works for you!

Step Six: Plan for additional costs

Be aware of other once-off costs that you will have to pay, over and above the deposit. These include initiation and administration fees, legal costs, bond registration fees and VAT/Transfer Duty.

Step Seven: Begin the search

There are a number of factors to consider when determining the initial amount to offer on a home:

• Sale price of similar houses in the neighbourhood for the past year or so will give you a good estimate of current market value. The estate agent will assist you with this information.
• View our Property Sites for advice.
• Mood of the market and the neighbourhood. In a seller’s market, the houses sell fast and sellers get close to the asking price. In a slow market situation, or where the house has been in the market for a while, or when the seller needs to sell quickly, the responsibility to negotiate for a good price after the initial offer has been made lies in the buyer’s hands.
• The general condition of the house is also an important pricing factor. Information concerning things that need to be done in or around the building must be taken into consideration when making a price offer.

Step Eight: Know what you are buying

View as many properties as possible. Make comparisons. Make a short list. Sleep over the short list. Do not guess or assume anything. Ask the seller or estate agent as many questions as you can until you are totally satisfied. Viewing the selected property several times will assist in final decision-making. It is your responsibility to ensure that a prospective home will not require excessive future maintenance. You are allowed to question the reason for selling and the number of other sales taking place in the area.

Step Nine: I like it! I want it!

The decision has been made! It’s now time to think about signing an offer to purchase with the seller and to complete your home loans application. Ask for assistance on 0861 1111 93, or apply online at www.mortgagepluscc.co.za .

Make sure you have the following documents on hand:

• Proof of income
• Copy of your South African ID or passport
• Copy of offer to purchase
• Proof of current residential address (municipal account, Telkom account or valid TV licence).
• Salary earners: most recent salary slip or banking statement for the last 3 months, a letter from your employer which will be followed by a telephone confirmation to your employer.

Once Mortgage Plus Bond Originators has received all the relevant documentation, the approval process begins. The bank will need to do a valuation of the property being purchased to ensure that it is of value and that the bank is willing to finance it. The home loan approval process can only be efficient if all the correct documents are provided. The estate agent will assist you in completing an Offer to Purchase. This makes the offer formal. It includes an offer price, closing date and financing information.

Step Ten: Tracking your Home Loan

• Once approved, Mortgage Plus will instruct the bond attorney to begin registering the bond.
• The seller will advise the Transferring Attorney to transfer the property. Title deeds and cancellation figures are requested from the bank currently holding the bond. A rate clearance is requested from the local authorities/municipality.
• The Bond Attorney contacts the transferring attorney and advises the amount available for guarantees. They then request the draft transfer deed and guarantee requirements.
• The cancellation attorney is requested to cancel the seller’s bond on receipt of a guarantee for the outstanding amount.
• Once the transfer attorney has received the title deed and cancellation figures, the buyer and the seller sign the transfer documents. The buyer pays the transfers costs to the Transferring Attorney.
• The Bond Attorney prepares the bond documents and the buyer signs these documents and pays the cost.
• The Bond Attorney lodges the documents at the deeds office.
• The deeds office receives the documentation and checks it before being registered.

This process can take about three months from the date of approval.

Step Eleven: Signing on the dotted line

• Before a Home Loan is granted, your financial position and credit record will be checked. The bank will pay out the loan on the day of registration.
• Once the legal documents are signed, the transfer fees paid and the seller of the property paid, the deed is done. You can congratulate yourself because you are now a proud owner of your new home!

Step Twelve: Living up to your responsibilities

Make your bond payments on time. It is vital that you do not miss a single monthly repayment, as the interest owing on the loan will increase and you’ll end up paying more than necessary. Debit orders are a good way of preventing late payments. If you have trouble making payments, inform the bank as soon as possible.

Step Thirteen: Save thousand on your Home Loan

By boosting your monthly instalments, you can make huge savings on interest and pay off your Home Loan in double-quick time.

Step Fourteen: The big move!

Moving into your new home is an exciting experience, but it can also be overwhelming. Here are some tips to help you settle in faster.

• Change address with all relevant parties and specific authorities. You can get a ‘Change of Address’ form from the Post Office to make the necessary changes.
• Remember to sort out your utilities (water and lights) connections.
• Locate your nearest emergency services: closest hospital, local police station, etc and record their numbers.
• It’s a good idea to meet your neighbours and find out about any initiatives in the area to combat crime, etc.
• In case of an emergency, make sure you know where to find the main shutoff valve for water, the fuse box, and any other important switches.
• HOC and insurance cover will be in place from date of transfer or occupation.
• Always plan a budget for other expenses like maintenance and repair, service costs such as security alarm, gardening services and any other home emergencies
• Every building has a life cycle, which means your home will require major repairs at some point. Repairs must be expected and planned for. Set aside an emergency fund to deal with unexpected problems ranging from major repairs to illness and job loss.
• Live within your budget. Prepare a monthly budget and stick to it. You should monitor your spending every month and evaluate your progress in meeting your financial goals.

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

Buying a home is often the single biggest investment most people make. As a result it is essential for home buyers to ensure they are fully prepared before getting on to the property ladder. South Africa’s leading bond originators, answers ten questions  for new homebuyers to consider:

1.      How much can I afford to spend on a home?

Before you look for a home it is important to know exactly how much money you can borrow and, most importantly, what monthly repayments you can afford. Affordability should be used as the main factor in deciding the loan amount to apply for. Banks will generally be comfortable should you be able to prove that you have sufficient disposable income after tax and all your monthly expenses to meet the monthly home loan repayment. If the repayment on the property you are looking to buy requires you to cut your monthly expenses to unrealistic levels, your loan will likely not be approved. Your bond originator will be able to help you in calculating and determining what amount you should consider.

2.      Do I qualify for all the criteria that banks consider before awarding a loan?

Ensure that all your paperwork is ready for submission. Employment history is very important as it reflects a pattern of stability and income. For most lenders a consistent income stream is a key criterion when working out how much one can borrow. Lenders will also want to look at your credit history, so that they can see a historic pattern of borrowing and repayment as well as how you have managed you bank accounts and other credit facilities.

3.      Why should I consider a bond originator?

Bond originators specialise in shopping around with multiple banks to give you the best chance of getting your deal approved on the most beneficial terms. Banks all have very different criteria for assessing credit and in how they price loans, so the terms you obtain from one bank may be very different from another bank. The bond originator will work with you to ensure a home loan best suited to your individual needs.

4.      Will I benefit from being prequalified for a home loan?

When looking for a new home it is strongly advisable that you are pre-qualified to give you a good sense as to the value of the property that you will be able to purchase.  The pre-qualification process can also pick up credit issues on your record that would need to be fixed before you can formally apply to a bank. The pre-qualification process not only streamlines the home buying process, but also ensures the buyer is able to negotiate from a position of strength. Ask your estate agent or your bond originator to assist you with the pre-qualification process.

5.      In addition to the monthly repayments, can I afford the additional costs?

Make sure you are aware of all the costs involved in buying a home. In addition to arranging a home loan and potentially putting down a deposit there are a number of other costs involved including legal costs, transfer duty, bond registration fees and bank charges. These fees can stack up quickly and they have to be paid in order to complete the process.  Over and above these ensure you have taken into account all the costs of home ownership including your monthly rates, levies and costs of insuring your home.

6.      How can I get the best interest rate?

The lower the bank’s risk in lending funds to a consumer, the better the rate it will be able to offer. In calculating the risk, factors such as the loan-to-value ratio (the amount of deposit you are willing to put down to offset against the purchase price thus reducing the required loan amount), the size of the loan, as well as the repayment-to-income ratio (the ratio between the bond re-payment and the buyer’s income) are considered. Currently the size of the deposit is a key factor driving the rate at which banks are prepared to do business.  The size of the bond that you apply for, your credit history and the investment value of the property you intend buying are some of the factors that may affect the rate you will be offered.

7.       Consider fixed interest rate options.

With interest rates currently at 35 year lows, one may want to give consideration to fixing the interest rate on your home loan when you apply for a bond. Lenders will often set a fixed rate bond at a slightly higher level than a variable rate bond; however, if you are working to a tight monthly budget, a fixed rate option removes risk and might be a prudent decision.

8.      Can I afford to put a deposit down?

Besides improving your chances of getting your home loan approved, a deposit will result in a more favourable bond rate which will save you in interest over the term of the loan. As a home loan is paid back over a long period, generally between 20 and 25 years, even a small deduction in the interest rate on your bond, can save you thousands in interest payments over time. 100% loans are available, but the credit criteria imposed on 100% loans are very restrictive, and our advice would be to put down as large a deposit as you possibly can to ensure the best chance of home loan approval.

9.      Consider the location of the property

The old adage of location, location, location still rings true for most South African homebuyers. Buying in the right area now can reap dividends in the long term when you choose to sell the property. It is important to get some idea of what the area you are looking to buy in may look like ten years down the line, as the demographics of an area can change relatively quickly.

10.     Be Transparent

Always be completely transparent with your lender or bond originator. If you do not provide all the relevant information, likelihood is that the bank will pick it up and decline your loan. “Full disclosure” should be your mantra. Work with your estate agent and chosen bond originator to ensure that the property you are looking for is one that you can afford.

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