Bond Originator Services

Bond originator services are an important way to receive assistance with the mortgage process, in South Africa. These services are increasing a great deal in popularity. In fact, over half of all mortgages are currently taken care of this way. Here are some reasons to consider these services, when you purchase a home.

Important Assistance

When you buy a home, you might normally go through a lot of time and trouble, without assistance. You might need to visit several banks and apply for bonds at each bank. This is not necessary when you have professional assistance. If necessary, originators can come to your home and assist with the application process. This can be done after most businesses are closed. There is a great deal of convenience in these mortgage services.

Efficiency

As you are not traveling from one bank to another, it is much more efficient to do all of your business with one service. There is no need to fill out multiple application forms, as you only have to fill out one. Originators know and understand the mortgage process, as they work with bank employees, every day.

Negotiation

Origination services are there to negotiate on your behalf. Since they are professionals, they are in a better position to negotiate with lenders. Also, they have access to several lenders, and they can get you the best deals that are possible.

Cost

You can save a lot of money with origination services, by getting lower interest rates for your loan. Not only that, there is no fee for their services. These fees are paid by the bank. You have many important services to benefit from, and few reasons to go it on your own.

Faster

It can take a very long time to apply for a mortgage, have it approved, and close on the sale. When you take advantage of origination services, that time can be cut in half. They are there to help cut through all of the red tape, which can sometimes get in the way.

Home Insurance Costs

You may save a great deal of money on your home insurance premiums. Thanks to the National Credit Act (NCA), banks cannot compel you to go with their insurance recommendations. You are free to look elsewhere. However, it can take a great deal of time and effort to search for, and find the best rates.

You bond origination service is there to help you with insurance, as they deal with insurance issues all the time. They will contact the insurance companies for you, and receive price quotes for coverage. This can get you the best premium rates.

Summary

When it is time to buy a house, it helps a great deal if you have assistance. There are many things to know and do, when it comes to the home buying process. A bond originator will act on your behalf, and deal with lenders and insurance companies. This will make it very convenient, as you will not have a lot of work to do. You also can save a lot of money, and time, in the process.

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

Home loans up as banks relax lending rules

At the height of the property boom in 2006, South Africa’s four major banks were approving an average of more than 30 000 new home loans every quarter.

During 2009 this number had dropped to well below 8 000 as banks tightened lending criteria considerably in response to the global financial crisis, as well as factors such as interest rate increases, high household debt ratios and the effect of the National Credit Act.

However, with sharp cuts in the repo rate over the past couple of years, the prime lending rate has dropped to below its 2006 level and, according to property analysts, all indications are that banks have been slowly relaxing their lending criteria again. The result is that the number of new home loans approved is on an upward trend again, having increased by 10 percent since 2009.

Mortgage Plus recently completed a study of the number of home loans approved per quarter and loan-tovalue ratios of the four major banks – Absa, Standard Bank, FNB and Nedbank – from 2006 to the first quarter of 2011, to assess whether the strict lending criteria applied over the past few years since the economic crisis have eased.

“There is a slow and cautious recovery and there has been a slight drop in the first quarter of 2011, with fears of a double dip recession being mooted. But an upward trend in new lending for the residential market indicates that banks are developing more of a desire for risk,” says analysts .

“Boosting indications that lending criteria have relaxed is the fact the loan-to-value (LTV) ratios are on a similar upward trend. After dropping from an average for all banks and all market segments of almost 90 percent in 2006 to just 79 percent in 2009, they have climbed back up to an average of 82 percent since the first quarter of 2010.”

She says there is a significant difference in LTVs, however, once these are assessed in terms of market segment. Poorer households are accessing home loans of over 90 percent LTV whereas the LTVs for the comfortably off and super-wealthy are around 80 percent and 75 percent respectively.

“A number of factors account for this trend. The first is affordability – it is often simply the case that comfortable and wealthier buyers have cash to put down deposits and have often sold previous homes at a profit, whereas those buying in poorer areas may not have savings or the profits from the sale of a home to invest.

“However, it should also be considered that much of the bad debt on the banks’ books after the downturn in property values and rising interest rates caused many homeowners to default, came from the wealthier sector and higher-priced homes. Also, there has been pressure on the banks to contribute towards South Africa’s low-cost housing backlog by making home loans more accessible to lower income earners.

“There has been comment from the property sector that the strict lending criteria are a major factor constraining house price growth, and that in light of low interest rates this approach may be too conservative – creating something of a buyer’s market,” says Ivins.

However, she says, there is clearly light at the end of the tunnel.

“Interest rates are low, home loan accounts are performing better and lending criteria should become more lenient, which should stimulate prices and demand as household debt comes under control and banks resolve the distressed property sales and properties in possession still on their books.”

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