Professional Lending Specialists “Bond Originators” vs. Bank?

Many potential home owner clients ask us why they would consider using us as opposed to going directly to the Bank themselves.

This is a fair question if you ask me, so this Fact sheet will hope fully clarify this for you.

Years ago everyone went to a bank, no questions asked, there really was not an alternative. The problem was that if one bank could not help you, you would have to visit bank after bank until you found one that could. Even then, how could you really know whether you were getting the best deal in the market?

Then along came Bond Originators “Mortgage Plus”. This was fantastic, as it also bought about significant competition into the heavily, big bank dominated market. This ultimately resulted in far more competitive pricing for all clients.

A  Bond Originator like Mortgage Plus is essentially a professional lending specialist who looks through all of the different lenders possible products and finds two to three home loans that are not only the most competitive available from all the major home loan lenders in South Africa, but also ensures that all the home loan features and benefits that you require are included in the selection.

Ultimately, you make the decision, however you know that the decision is based on your own parameters, and represents the most suitable and competitive mortgage loans available from a large pool of lenders.

Myth: The most significant myth that exists is the fear that you are paying more to use a Professional Lending Specialist like Mortgage Plus than you would by going to the bank directly. That simply is not true! The Lending Specialist earns their commission from the bank, not from you the client.

Making it Easy!

Remember when you had your own bank manager that you could call to help you when you needed some extra funds on top of your home loan to put that pool in, or to buy that investment property? Relationships were paramount, and you returned to that person time and again as they looked after you. Now it is very rare to have that kind of relationship from a bank.

A Professional Lending Specialist like Morne Prinsloo – 079 047 5172 can build that relationship with you and manage several lending relationships between several banks. For some investors for instance, they do not want all of their eggs in one basket, and having the same contact point for all of their home loan facilities is a very convenient way of managing their home loan portfolios.

We help you complete all of the necessary paper work, take the stress out of the home loan application by managing the bond application through credit and as we know the lending policies of each lender, ensure that the home loan is submitted with everything required to make it a smooth process.

So why choose a Professional Lending Specialist over a bank?

• We specialise in Home Loans – That is all we do!
• Significant experience in the position
• You the client are the boss, not the bank
• You can build a long term relationship with the same home loan specialist
• We have access to all of the mortgage options from most lenders in throughout South Africa
• Flexible, we can work in with you to make it happen.
• We own our own business, so we need to make sure you have a great home loan / mortgage experience.

Remember, we are professionals with many years experience in the home finance industry, and our business is all about giving you total satisfaction. We understand how banks think, and therefore take the stress out of dealing with them directly. We become your personal bank manager with the lender to ensure that your experience is a great one.

We are also here for you when you need to ask a question. Anytime!

If you would like to speak to a Professional Mortgage Specialist about your lending requirements, please phone Mortgage Plus Bond Originators on:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Commercial property tips for 2012

South African prime commercial properties are expected to perform better this year when compared to the not-so prime properties, according to FNB.

The FNB Property Barometer report on commercial property aspects for the third quarter of 2011 saw a rise in all commercial property average price growth.

The same quarter also saw a very slight rise in the average capitalisation rate but more significantly the FNB All Commercial Vacancy Rate Index rose from 93.6 as at the Q1 2011 to 97.7 by Q3 2011, the highest vacancy index reading since the fourth quarter of 2005.

Writing in the report, FNB property strategist John Loos says should this rising vacancy rate trend continue, it could be expected to dampen rental income prospects.

“This would also lead to a more noticeable rise in capitalisation rates, which in turn could be expected to exert downward pressure on price growth.”

He explains that 2012 looks set to be a weaker global economic growth year than 2011 and the weak economic growth is expected to exert upward pressure on commercial property vacancies.

Higher vacancies will lead to anticipation of an increase in capitalisation rates which in turn could exert downward pressure on real commercial property values, he says.

“We believe that a further sign of possible looming commercial property price weakness is the slowing in year-on-year price growth in the residential market in recent months.”

Loos says while commercial property is not believed to be as over-priced as residential and its yields are estimated to be higher than residential, it is subject to the same interest rate and economic trends as residential.

This generally tracks the direction of residential price growth trends with something of a lag.

“Economic indications are that commercial property could be in for a challenging year in 2012.”

After a mini-recovery in 2010, the Investment Property Databank (IPD) reported declining commercial property returns in the first half of 2011.

During this expected period of weakness, if one could generalise, it would appear that prime properties/areas look set to hold up better than the less illustrious ones, he says.

The IPD report indicated a significantly more rapid rise in office vacancies of Central Business Districts (18.1 percent in the first half of 2011) compared to de-centralised nodes (10.4 percent).

In the case of retail, it has been the smaller community (8.1 percent) and neighbourhood (10.2 percent) shopping centres that have seen more noticeable rises in vacancy rates, while regional (3.2 percent) and super-regional (2.4 percent) shopping centres remained at far lower vacancy rates in the 1st half of this year.

Despite gloom statistics on commercial property, there is seemingly a growing interest from investors wishing to buy commercial property rather than residential property.

According to Jason Lee, national manager of  Commercial this interest is understandable because in most cases, returns on commercial are far higher and often double that of residential property of approximately the same price.

“Commercial tenants are also far easier to evict than residential tenants if they default,” he says.

If you are interested in investing in commercial property this year, Lee has the following tips:

- look for residential property located near other residential homes and already rezoned for commercial purposes.

Also check out properties on a busy road where a conversion to commercial property would be in the interests of the community and likely to achieve council’s approval.

- when making an offer for such a building, it should be subject to the departure application being successful.

This might involve buying the unit and waiting for a few months, if several units in the area have already been granted departures the wait is usually short. The buyer cannot afford to risk the application being turned down.

- an advantage of this type of building is that should it then prove difficult to secure a commercial tenant, it will usually be possible to find a residential one.

As the building would have been originally zoned for residential use, banks will, whatever the outcome, in most cases give the bond on a 20 year basis whereas on commercial property, it is likely to be for no more than 10 years.

- another option is to look for newly developed sectional title units in an industrial park or office complex.

New or upgraded parks and complexes are particularly popular currently and recent bank data suggest that they have weathered the storm better than second grade properties.

- the so-called strip or convenience centres are fast becoming attractive to investors.

This is where it is sometimes possible to secure two or three retail outlets all of which may be benefiting from the presence in the centre of a draw card anchor tenant such as a popular supermarket.

Such centres must have adequate parking as experience has shown that they never perform satisfactorily if this is lacking.

- when the new owner starts looking for a tenant, it is important that the tenant is thoroughly checked and get references from at least three previous landlords.

- when a lease agreement is drawn up, it is essential to get two to three months rental upfront as a deposit against damages or sudden desertion as well as for unpaid municipal services.

The wording of leases has to be watertight in terms of the new Companies and Consumer Protection Acts.

Lee says owners should not be put off by the tenant who haggles over every clause in the contract.

This tenant is likely to be a good payer, the tenant one should be wary of is the one who signs every clause without carefully reading through.

He adds that experience has shown that such people are likely to be equally slack about paying their rent.

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