First time buyers

Well done! The decision to buy a home has proven to be one of the best made for millions of happy homeowners. It is a fact that property is a good investment, especially when you compare it to paying rent. It is important, however to enter the property market with a good understanding of how a property purchase works, what your costs will be and a respect that this is probably one of the largest financial commitments you will ever make.

Best advice

Your Mortgage Plus consultant will give you the best advice on all aspects of your home purchase, and most importantly on financing it, particularly when the banks differ in their approach to lending. We will help you understand the different interest rates, fees and charges, and terms and conditions available. We will explain to you the features of the different loans and why they are more suited to your individual requirements.

Important Pointers

• Know what you can afford and the costs
• Consolidate your finances
• Significant savings are possible by consolidating all your finances. As home loan rates are significantly lower than those for personal loans, overdrafts and credit cards, but significantly higher than savings and current account rates, it makes sense to consolidate everything into your home loan account.

Minimise your Mortgage
By effectively structuring your finances, you can significantly reduce your total home loan debt. Arranging part of your salary to be credited directly to the loan and making additional repayments on an ad hoc basis (like when you get a bonus) will have very beneficial results. By sticking to a workable monthly budget and avoiding unnecessary debt, you can repay your loan much more quickly and save vast amounts of interest. To find out how much interest you can save and how many years you can take off your loan, contact us today.

Example

You can settle your home loan in 5 years:

• Pay off an extra 1.2% of the original capital debt each month (R 1 200 per R 100 000)
• Adjust for interest rate changes when they occur
• Don’t access funds already paid off

Whilst this may mean some sacrifices, you will save a fortune in interest.

To qualify:

• Deposit of anything from 0 % – 30%
• First time home buyers only
• Have a clean credit record.
• Minimum loan amount of R 100 000
• Single or joint income must be minimum R 6 000 a month
• Your monthly bond repayments cannot exceed 30% of your gross monthly income. Also refer the National Credit Act stipulations.
• Permanent employment

You can take advantage of the option provided by certain banks of a 3-month holiday on home loan repayments.

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

Work on your credit score
Your credit history is one of the first things that the lending institutions look at when they review your home loan application. It clearly outlines a person’s financial and credit performances in the past which holds a serious weighting as to whether or not you qualify for a loan, the amount you qualify for and the interest rate you stand to pay.
You are entitled to apply for a credit report on yourself every year from the government credit bureau, free of charge. You should carefully analyse your report before applying for your home loan so that you can take steps to improve it wherever you can. Be on the lookout for incorrect records and if there are any mistakes, write to the credit bureau in question, explaining what needs to be changed and why. Remember to send your requests through with all the necessary supporting documentation wherever necessary.

Calculate affordability
Credit providers have to perform an affordability assessment before granting credit. This process takes into account all your financial obligations, such as home loans, vehicle finance, overdrafts, credit cards, secured loans, and domestic expenditure, which are compared to the value of your assets and income in order to calculate your current financial standing. You should do your own assessment by using one of the many affordability calculators on the Mortgage Plus website. Here, you can input all your current monthly payments, debts and other expenses in order to calculate what size home loan you can afford. This is a very good exercise, as it will show you what you could possibly cut back on in order to qualify for a higher loan.
However, you need to remember that the mortgage repayment is not the only thing you need to factor in with regards to affordability. Owning a home involves various additional expenses, such as paying rates and taxes, electricity and water bills, homeowners insurance, sufficient life cover on your mortgage, as well as the cost of maintaining your property. It would also be prudent to factor in headroom for any potential interest rate hikes – you should be able to cope with a minimum of a 2% increase over the next 12 to 18 months.
Any lender needs to determine that you have had a stable income for at least two years. As such, self-employed individuals or commission earners will need to prove this aspect of their income before a home loan will be granted.

Save, save and save some more
It is essential that you improve your disposable income by as much as you can, as credit lenders will take this into account when they calculate the size of home loan you qualify for. For every R1 300 you can save on your monthly financial obligations, you will be able to increase your home loan spending power by a full R100 000. Also, being able to save a big deposit of around 20% to 30% offers the lenders assurance that you are working towards a good credit rating and that you have the financial means to meet future obligations relating to the loan. The bottom line is that the more money you have saved to put towards buying your home, the better chance you will have for being approved for a home loan.

Work with a home loan originator
In order for you application to go through smoothly, you should get all the required documentation ready beforehand. Applying for your home loan with the help of a mortgage originator instead of taking the DIY approach will greatly improve your chances of success. Mortgage originators are professionals who understand the various procedures of the different banks. They know which paperwork to submit to motivate your application, they can help negotiate the best possible interest rates and they will help you through the entire process until your home loan is finally registered. The best part is that this service is free of charge for the homebuyer.

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