What is a mortgage? - www.mortgagepluscc.co.za

• A mortgage is a loan that is secured on immovable property, normally your home, hence the term “home loan”.
• The mortgage is lent to you in a lump sum to pay for the property and is legally bound to the property by the attorneys who register your mortgage bond. You then have to pay back this mortgage over a given length of time.
• This time period is usually 20 years, but it can vary between 5 and 30 years depending on circumstances.
• If you don’t make payments as agreed, the lender has the right to sell your property in order to recover their money. This is rare but it is important to understand from the outset that if you do not keep up with your mortgage payments you are at risk of losing your home. 

How much can I borrow for a mortgage? – Affordability Calculator

• This is often one of the first questions to be asked.
• Unfortunately it is not an exact science and all banks have their own methods to calculate affordability.
• Since the introduction of the National Credit Act this has become more complicated.
• The most accurate method of establishing how much you are eligible to borrow is to contact your Mortgage Plus Bond consultant.

• Generally the larger the deposit (as a percentage of the value of your house), the better the interest rate you can negotiate with the bank.
• This is because the lenders know that if you default on your loan and they repossess the property, there is more chance of them getting their money back on the sale of the property. Hence there is less risk to the lender.
• The larger the deposit you put down, the lower the rate of interest you are likely to get.
• A larger deposit also reduces the risk of you going into negative equity, where the value of your house falls below that of your mortgage. This makes it difficult to sell your house because the proceeds won’t cover the debt you owe. 

The main additional costs are:
• Transfer fees
• Conveyance fees
• Bond registration fees
• Valuation fees
• Initiation fees

• Mortgage brokers are paid a commission by the lender for every mortgage organised on behalf of their clients. A mortgage broker should not charge their client a fee.
• As a client, always ask your mortgage broker about their commission relationships with lenders. Good brokers will always disclose this information.
• You will require significant additional funds to cover the deposit and fees. Remember to include these costs when calculating how much you can afford to spend on a house.

How much will my mortgage interest rate be?

Your mortgage interest rate will depend on a number of factors such as:
• The loan to value ratio (the size of your mortgage compared to the price of the house you are buying or own).
• Your repayment to income ratio (the cost of your monthly mortgage repayment to your gross monthly income).
• The size of your bond.
• Your credit profile.
• Contact your Smartbridge mortgage consultant for advice on your likely interest rate.
• The interest rate charged on your mortgage is crucial. It will determine how much you can afford to borrow and therefore how much you can afford to spend on a house

Your maximum monthly mortgage payment is based on your monthly disposable income. To calculate your monthly disposable income: • Subtract all your deductions such as tax and UIF from your gross income to get your net income. • Calculate your total monthly expenses, such as groceries, car insurance etc. • Subtract your monthly expenses and existing debt such as credit card, vehicle finance, or loan repayments from your net income. • The balance (if there is any) is your potential maximum monthly mortgage payment.

I have additional sources of income, how will this affect my mortgage application?

• Lenders will take into account additional income you may have such as rental income, investments and dividends etc. • Lenders vary in how they view additional income streams. • Contact a Mortgage Plus consultant to assess and discuss your options.

Can family members make a contribution to my mortgage application?

• Yes.

• You can take into account contributions from family members if they are living on your property. • If a partner or child is making a contribution to the family finances, then the banks will recognise it. • It is your responsibility, as the borrower, to prove these family contributions.

Is my annual bonus taken into account in my mortgage application?

• Yes.

• Annual bonuses are taken into account but you will have to prove them with entries on your bank statements and letters from your employer.

1. The bond originator will do the application process with every bank. The mortgage originator will collect all the necessary documentation and setup your application, saving you time and money!

2. It’s one bond form. No more. This will be submitted to all the banks on your behalf by the bond originators. Submission to multiple banks is not really seen as a good things in the mortgage industry, it’s generally only submitted to a second or third bank should the first decline. This is the difference between a GOOD and a BAD bond originator.

3. Originators almost guarantee you better rates than the rates you’ll get should you go directly through a bank. Originator have relationships with the banks and home loans departments which they often use to get clients better rates.

4. Bond originators are FREE. All payments made to originators are made by the banks. Be very wary of bond originators that charge a fee.

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

Top 10 Questions to Ask Your Agent

Choosing the right estate agent is a crucial step in the process of selling your home. The easiest way to find out if an agent is suited for the job is to ask as many questions as possible. Here are 10 of the most important questions to ask to ensure you are dealing with the right agent: 1.  What experience do you have? It is vital that you establish the amount of experience and knowledge an estate agent has before you choose one. Also remember to ask about other special certification or areas of expertise that the agent might have. 2.  Where will you be advertising my property? A good agent will use all advertising mediums to advertise you property including billboards, brochures, open houses, newspaper and online listings. Be sure to also ask how often ads will be published. 3.  What statistics can you show me about previous sales? An estate agent should have a record of their previous transactions, including how many properties they have listed, how many properties they have sold, the average time it takes them to sell a property, etc. Use this opportunity to ask why some properties were not sold. 4.  How accessible are you? You need your agent to be easily accessible 24/7. If an agent tells you that they are only working part time, you have to accept that he/she won’t be available most of the time. You also want your estate agent to attend the open house personally and not an assistant.  If you are only available on weekends, make sure that your agent is willing to work weekends. 5.  What is your commission cut? Make sure that you agree on this and that you are aware of all terms and conditions. 6.  Do you have contactable references? Ask for the contact number of the agent’s last three clients, which does not necessarily mean the last three clients that had their properties sold. You want to hear the good as well as the bad. 7.  How many properties do you currently list in my area? Note that it is a good thing if an agent has had a large number of properties in your area, because this way he/she will be up to date with recent sale activity in the area as well as market prices. What you don’t want is an agent that has a large number of properties in a more expensive area, as this might mean that he/she will focus more on the properties that offer more commission. 8.  Are you registered with the Estate Agency Board? The agent you choose should be registered with Estate Agency Affairs Board (EAAB) of South-Africa. You can contact this organisation to ensure that your agent is registered and that he/she has a clean record, meaning no complaints have been filed against the particular agent. Visit their website for more information: http://www.eaab.org.za 9.  What listing price do you suggest and why? This is a very important question and the agent’s knowledge, experience in your area as well as reasoning behind the price should be taken into consideration. Beware of agents that say “yes” to any price. 10.  Do you offer any other services? Ask agents if they offer any other services and if they can make referrals such as property inspectors, bond originators, moving companies etc. Also find out if an agent has any help from assistants or other staff to ensure that he/she will be able to get to all the services that is promised.

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