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 originator provide a service to you in applying for a mortgage loan. 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
For more assistance with regards to Applying for Home Loan Finance .
Email: morne@mortgagepluscc.co.za
Ph: 011.327.4489
or Complete This Online Form

Banks start to ease up with bond applications

WITH banks beginning to relax their lending policies, there is support for a revival in the property market and now is the time to apply for a bond.

There should be a much-improved chance of being approved for a loan on favourable terms. Banks are again offering 100 percent loans and the current lower interest rates make it a better time for consumers looking to buy.

Before you even apply for a loan, check whether the property is affordable.

Determining the right price range is an essential first step to avoid wasting time looking at unsuitable properties.

A property finance consultant will take you through the exercise of establishing what you can afford, taking into account your specific financial requirements.

Monthly repayment affordability is generally calculated at 25 to 30 percent of joint gross income, but other criteria, including existing debt commitments, may affect the size of the loan that the bank will grant.

Remember that the hidden costs (transfer and bond registration fees) usually have to be paid up front and add a sizeable amount to the cost.

One way to ensure that the loan you apply for will be granted is to get a prequalification. Companies such as Mortgage Plus will, at no cost, prequalify you for a certain bond amount, which takes the stress out of applying for a bond once you have decided on buying a property. Another positive factor is that buyers who are prequalified are in a much stronger position to negotiate with sellers.

Bond applications may be declined for several reasons: you may not be able to afford the monthly loan repayments, or may require a 100 percent loan that would push the repayments beyond your reach.

Another critical consideration is your credit profile. This includes your employment history and consumer bureau results, which provide a picture of your debt and payment history. If the bank considers you a good credit risk, it will assess the value of the property to be purchased.

If this, too, meets all the relevant criteria, the loan is usually granted. The mortgage originator also often motivates the merits of a particular loan application to the bank’s credit manager.

To improve your credit record, cancel out-of-date credit cards and ensure that you pay all instalments by the due date every month.

To help the bank determine its risk, you will have to provide personal information such as bank statements, salary slips, a statement of assets and liabilities, a statement of your monthly expenses and information on your credit history, including whether you have ever been insolvent.

An originator can ensure you have all the correct paper work to avoid unnecessary delays.

Mortgage originators shop around and negotiate the best deal for customers for free. Obtaining a preferential rate of just 0.1 percent below prime can make a big difference to monthly repayments. But a mortgage originator must take more than just the rate into account and will structure a package to suit an individual.

To structure a package to suit an individual needs please phone (011)327-4489 or go to www.mortgagepluscc.co.za

The word “home loan” or “mortgage” have exactly the same meaning. Since most of us do not have enough money to pay cash for a home, we need to apply for a home loan or mortgage from a bank to assist us with the purchase

If you found the home of your dreams and the bank grants you a home loan then your bank will pay the owner of that property. Thereafter you will have to start to making monthly repayments to pay off the debt you now have

Although the definition of a home loan is straightforward, the actual process is very detailed in nature. Here are some basics about home loans that you should know.

Home loan amortization

Amortization is a term used to describe the payment of a homeloan through a schedule of systematic payments. You will have to keep up with your monthly payments to the bank until your home loan is paid in full.

Your monthly payments are made up of principle (the original loan amount) and interest payments. A loan amortization schedule shows the allocation of each loan payment to interest and principle

Loan Term

Your loan term is the amount of time it takes you to pay off your loan. The loan term can vary from 5-30 years, although most people in South Africa, prefer a 20 year loan term.

The longer you take to pay off your loan the lower your monthly repayments will be, but at the same time the interest that you will be paying will be much higher.

Types of Mortgages

The most common ones in South Africa are the fixed, variable rate mortgage as well as, more recently, the interest only mortgage.

A fixed rate mortgage means that your repayments remain the same over a certain period. The only increase that you can expect is the result of increases in insurance rates and property taxes.

With a variable rate mortgage your monthly repayments will fluctuate. If interest rates are going down your monthly repayments will decrease, but should rates go up your payment will increase accordingly.

With an interest only mortgage you only pay off the interest on your loan and delay the repayment of the principle debt. However, you will have to settle the debt eventually by either restructuring your payments or by selling your home.

Financial Calculators
If you are comparing either a fixed, variable or interest only mortgage home loan, then you could use one of our financial calculators to help you decide.

You should now have a much better understanding of what a home loan or alternatively a mortgage is.

For a more detailed discussion on various subjects you can call us on (011)327-4489 or go to www.mortgagepluscc.co.za