Mortgages – Looking for the Best Mortgage

You’ll want to compare all the costs involved in obtaining a mortgage. Shopping, comparing, and negotiating may save you thousands of rands.

Obtain Information from Several Lenders all at once through Mortgage Plus

Home loans are available from several commercial banks and mortgage companies. Different lenders may quote you different prices, so you should contact several lenders to make sure you’re getting the best price. You can also get a home loan through a mortgage broker.

Brokers arrange transactions rather than lending money directly; in other words, they find a lender for you. A broker’s access to several lenders can mean a wider selection of loan products and terms from which you can choose. Brokers will generally contact several lenders regarding your application.

Be sure to get information about mortgages from several lenders or your mortgage broker. Know how much deposit you can afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest rate is not enough.

Ask for information about the same loan amount, loan term, and type of loan so that you can compare the information.

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

Financing your commercial property

A commercial property loan offers long-term finance in the form of flexible loans for the purchase of commercial or industrial premises, or residential properties classified as commercial and used for business purposes.

For property developers a commercial property loan offers building loans for the construction of commercial or industrial buildings.

A commercial property loan also caters for further advances to existing borrowers for extensions and improvements to their commercial or industrial properties.
Properties that can be financed through a commercial property loan are Shops, offices or blocks of flats,Warehouses, showrooms, factories or similar industrial premises, Sectional title complexes (zoned for business purposes) including individual units in these complexes.
Existing residential properties which are primarily used for business purposes and which have business rights or consent use.

The properties to be mortgaged must be in South Africa and must be located in prime areas.

If you’ve found a property you’d like buy to for your business, the next challenge is to apply for a bond. Here are some frequently asked questions about finding finance for commercial property.

Q: What is a commercial property?

A property that is legally zoned (permitted) to have a business conducted from it. Properties that can be financed through a commercial property loan are:

Shops, offices or blocks of flats
Warehouses, showrooms, factories or similar industrial premises
Sectional title complexes (zoned for business purposes) including individual units in these complexes
Existing residential properties which are primarily used for business purposes and which have business rights or consent use

Q: How can I prepare before I apply for a loan?

A: The criteria for a loan will depend on who you approach. Do some research – websites are generally a good source – about who you can approach and what they expect from prospective lenders. Have your business plan ready and all the research you have done on the property you intend to buy. A lender will want you to convince them that this is a good investment, so compile the documents to this effect. Call: 0861.11.11.93

Q: Can I approach any bank for a loan?

A: Finding someone to back you is not as difficult as it used to be. You have to go to a bank or a financier that deals with commercial property. There are also various private and government-supported funds geared towards SMEs that may give you a loan. Have a look at our Finding Financing category for the names of organisations to approach.

Q: What kind of interest rate will I be charged?

A: Just like you would if you were buying a home, you can shop around and see which bank will give you the best interest rate.

Q: Are there any other costs I should be aware of?

A: Make sure you know what costs are included in your loan. Most financiers will charge administration fees and VAT, so get the exact amount and ask whether it will be included in the loan amount or if it’s payable separately. Also factor in the cost of the legal fees associated with your loan, such as transferring attorneys, etc.

Q: Do I need a deposit?

A: No matter who you are asking for money, your loan will have to meet with certain requirements. Most lending institutions will expect you to have a certain percentage of the loan to put down as a deposit. The exact requirements will depend on who you approach, how they work and on the viability of your property purchase.

Q: What loan term can I repay the loan over?

A: Again, this depends on who is financing your loan. Most institutions do loans over a 10 year period, while some will consider 15 and 20 years. This normally also varies according to whether you are buying the property to occupy yourself, or if you will be renting out space to tenants.

Q: What else will be required to secure a loan?

A: It is often recommended and sometimes a requirement that your loan is supported by suretyships. If you will be renting out space to tenants, this will count in your favour as long as you can prove that lease agreements have been ceded.

Q: How do I know if I’m paying a fair price for the property I want to buy?

A: Whoever you are applying for a loan with, will send out an expert to value the property. After all, it’s in the financier’s best interest to ensure that the property is indeed a good investment. The financier will usually provide a loan according to the market-related value of the property. If the asking price is much too high, the financier will advise you accordingly, but it’s for you to negotiate the purchase price with the seller.

Q: Who will do the registration of the property?

A: Once you receive finance to buy your property, the registration process can begin. Your property will be registered by a transferring attorney – appointed by the seller – who facilitates the transfer of ownership from the seller to you. It’s probably a good idea for you to have your legal representative look over all documents to make sure they are in your best interest and to clarify any inconsistencies.

Q: Who is responsible for insuring the property?

A: Essentially, the property will be registered in your name, making you the legal owner. You are therefore wholly responsible to have the property adequately insured. Get advice from experts in this area, to ensure that you have all the necessary insurances in place.

Business Partners offers investment financing for a wide range of commercial and industrial premises and the expertise to match the needs of each individual SME and/or entrepreneurial investor with the right property.

Q: Is there a service provider that offers finance, broking and management solutions all in one?

A: As with any purchase of this kind, it’s important to get sound financial advice from an expert in this area. Before you even consider buying a property and approaching a financier for a loan, get a financial planner to look at your finances and determine whether it’s in your best interest (and the best interest of your business) to buy a property.

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