The leading banks usually offer various types of loans. At Mortgage Plus Bond Originators we will help you choose the one that best suits your needs and help you through the application process.

The following are brief descriptions of the various types of loans available.

ORDINARY LOANS

A loan granted to an applicant who uses the proceeds of a loan to purchase /acquire immovable property on which there are existing buildings and other fixtures or which is vacant land.

ORDINARY LOANS: FURTHER ADVANCE

Where the owner of fixed property that is already bonded as security for an existing loan requires further finance, the bank will grant a further advance subject to the value of the bonded property being adequate security for the increased loan amount. The client is normally allowed to use the amount of the further advance extended according to his own discretion.

BUILDING LOANS

A loan granted to an applicant to erect a building on a vacant stand (client applies for a full building package).

The loan is granted subject to a mortgage bond being registered in favour of the bank. After registration of the bond, the bank will advance monies to the client or his contractor as the building work is progressed (payment of funds is based on progress, e.g. land, foundations, roof height and finishes)

BUILDING LOANS: FURTHER ADVANCE

Where the owner of the fixed property that is already bonded as security for an existing loan requires finance to erect buildings, effect alterations, improvements or additions to the buildings already established on the immovable property. If the future value of the property when complete is adequate, the bank will be able to grant the further advance. The bank may advance the full amount immediately (depending on the security available against the mortgage bond), advance the amount as progress is made with the building operations, or may retain a portion subject to certain suspensive conditions. Where the margin between the loan account balance and the mortgage bond allows for such an advance to be made, the bank may do so. If the margin is insufficient, an additional mortgage bond will have to be registered.

ASSET-BACKED FUNDING

Mortgage Plus Commercial fills a void in the market for clients who require funding for working capital, need to reduce their bank exposure or need to meet other short term requirements. This product has been designed to meet the requirements of clients who are asset-rich but in need of short-term liquidity. Mortgage Plus Commercial does not lend against vacant land, but rather against residential, office, industrial and retail properties.

Minimum Requirements:

The borrower must be a juristic person in terms of the National Credit Act

• Maximum transaction value not to exceed 60% of valuation
• Valuation of property to be done at client’s expense
• Minimum advance of R 1 500 000 (no maximum)
• A first bond is to be registered over the property
• Maximum loan term of 12 months

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

Those looking for a new home often ask: what is the better option, to build a home from scratch or to buy an existing one?

Adrian Goslett, CEO of RE/MAX of Southern Africa, says there is no right or wrong answer to this question. However, each option should be cautiously worked out from a financial point of view and carefully considered according to individual requirements.

“In the past it was considered more cost effective to build a new home, but more recently the recession and reduction of property prices coupled with increased building costs has meant that buying an existing home is now often the more cost effective option,” says Goslett.

This is backed by a report released by Statistics SA which shows that building costs have increased substantially over the past year. This if reflected in the fact that the value of building plans passed by the larger municipalities increased by 4,9% during the period January to June 2011, compared to the same period in 2010. This calculation is concluded at the current building prices. The largest increase in building costs reported was for residential buildings, which increased by R1,12 million or 8,9% for the same period.

Jacques du Toit, a senior property analyst at Absa, said that existing homes are currently 29.5% cheaper than new homes in the current market. He said that building an average home will cost in the region of R1,5 million, while the average price of an existing home with the same specifications is around the R1,1 million mark.  He attributed the gap between the building and buying cost to the significant housing price drop over the last few years, while building contractors have been unable to reduce their costs largely due to the cost of commodities such as materials and labour.

“Not every homebuyer will make the decision on whether to build or buy based purely on the cost and some still opt to build a home to their particular specifications. And although the slowdown of the market means that buyers are spoilt for choice with the large amount of existing properties for sale at fair market value, the question to build or buy is still not an easy one to answer,” says Goslett.

On the one hand, many people would like the creative control and freedom to design and build their own home. The flipside to that coin, however, is that most people have fairly limited knowledge about designing or building of a home.  There is also the risk of building being affected by other external aspects such as delays due to power outages and bad weather.  Possible petrol prices hikes will increase transport costs, which in turn will increase the cost of the building material or labour.

According to Goslett, a challenge that buyers could face is the fact that in most established areas there are very few vacant stands on which to build residential homes – if there are any at all.  He adds that while a newly built home may have the benefit of the initial low maintenance and the various guarantees that come with new workmanship, there is no guarantee on the future of a new neighbourhood and return on investment.  “Whether planning to build or buying an existing home, the location of the home and proximity to amenities is something that should always be considered,” says Goslett.

“Property should be viewed as a long term investment, so whether buying an existing home or building your own, it is always important to do the necessary research and make a decision that best suits your requirements, both now and in the future.

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