When the time comes for an individual or family to purchase a home, they may be wondering how they can get a home loan. It is unlikely that the person or party will be able to pay for the entire house with cash. Yet, if they are able to come up with ten percent or a greater amount of the final sale price of the home in cash or a housing subsidy, possess a good credit rating, and have sufficient extra income to make the monthly payments, then they ought to be capable of getting a home loan for the remaining approximately ninety percent of the balance.

Mortgage Originator Services

After a person or party has signed an offering contract to buy a house, they will be given a specific and limited amount to time to come up with the home loan. The fastest and most efficient means of accomplishing this lies in a mortgage originator. Mortgage originators keep all of the information on hand regarding the various and competing home loan packages that the banks are offering. They are capable of suggesting to purchasers which bank and package might best line up with their particular financial profile. More importantly, a reputable mortgage originator will package and submit the purchaser’s application to a variety of lending institutions at once, enabling the prospective purchaser to swiftly contrast the resulting offers for the lowest interest rate, as well as the most attractive total loan deal. Since these mortgage originators are compensated by the banks for brining them business, this useful service does not cost the home buyer a penny.

Bank Requirements for Offering a Home Loan

In advance of a bank approving a loan for the use of buying a house or other property, the institution will require documents in order to review a few things. These items and accompanying documents include the following:

* The employment history and record, as well as the disposable (after deductions) income of the potential home purchaser, in order to determine if he or she will be able to afford the home loan payments on top of other existing obligations, including car repayments, living expenses, and tuition expenses. The National Credit Act requires lending institutions to be extremely careful when making any sort of loan to ensure that the borrower will not become over-indebted as a result of the loan.

* The credit report of the prospective home purchaser, to learn if he or she is in the reliable habit of paying their bills on time and if there are any judgments for outstanding bad debts.

* The property’s present market value, to guarantee that proper security exists for the loan for which the potential purchaser has made a request. In general, a bank would be happier if the property was valued at a greater amount than the loan amount requested at the beginning, and if it was projected to increase with time. Because of this, it proves to be much more challenging to obtain a loan in any locale where the values have been declining or simply staying the same. This is true even assuming that the potential purchaser has a terrific credit history, as well as a high disposable income.

* The presence of a good deposit. Banks are always more satisfied if a potential home purchaser is able to put down a full ten or twenty percent deposit, since it demonstrates that the purchaser is sufficiently committed to the purchase to tie up a portion of his or her own capital. A deposit also helps to guarantee an appropriate loan to value (LTV) ratio – this signifies that there should be significantly greater value inherent in the property than the amount which was loaned by the lending institution.

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

Home Loan & Property Buying F A Q s

• To whom is my deposit paid?
Depending on the stipulation in the contract, the deposit is either paid over to the Estate Agency or the Transferring Attorneys as they both have trust accounts where your money is protected. Never pay the deposit directly to the seller or the individual agent and always insist on the relevant receipts.

• Can I claim interest on my deposit?
Interest on deposit is usually paid to you after registration of transfer. You can request that either the Estate Agency or Transferring Attorney holding the deposit act in your interest by arrange for the deposit to be invested in an interest-bearing account.

• To whom is occupational rental paid?
It is easiest to pay occupational rental to the Estate Agency or Transferring Attorney who will either pay it directly to the seller or into the seller’s home loan account. You can pay it to the seller directly but may then be asked to provide proof of payment.

• How long will the transfer take to register?
This usually takes about three months from the date of sale, depending on the circumstances and due dates for the home loan grant stipulated in the deed of sale. Registration can be completed within 6 weeks to 2 months from the date of sale if there are no complications or delays from any parties involved in the deal.

• What is the cost of transfer and home loan registration?
There are schedules of transfer and home loan registration costs available from both estate agents and conveyancing attorneys. Transfer costs are based on the value of the property and whether you are buying as a natural person or legal entity such as a Trust, close corporation or company. Home loan registration costs are based on the total registered value of the loan.

• When must my transfer costs be paid?
Transfer duty has to be paid in advance and is usually due a few weeks after the date of sale. Any delay in making this payment will unnecessarily delay the transfer.

• Who will register the home loan?
All the banks have panels of conveyancers that they use for home loan registration and one of these will be instructed to register your home loan. Your mortgage broker will have special rates with various attorneys on the banks’ panels and it is advisable to use one of those. Furthermore, if the transfer conveyancer is also on the bank’s registration panel it will be expedient to let them do the registration as well.

• Who will contact me on registration ?
Your conveyancer’s secretary should contact you on registration and provide you with a final statement of account. Your estate agent may also confirm registration. Finally, your bank will send you a letter advising you of the registration of the home loan and the date when your first installment is payable.

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