Home Loans

In South Africa there is a variety of different home loan options available to the home buyer. Before you start take time to become familiar with the home loan industry in South Africa by doing some research by looking at the bank’s product information in their branches or on their websites.  Home buyers also have the option of using a mortgage originator to source the best interest rate or do all the work themselves.

Choosing the best interest rate option for your home loan is very important and can make a big difference on the overall amount you end up paying on your bond. Interest is the additional fee that you pay when repaying the loan and can therefore differ from bank to bank. The higher the interest rate is, the more your loan will cost you in the long run so try to negotiate the lowest rate possible on your home loan. In order to get the best interest rate, it’s important to shop around and compare loan rates and terms before deciding on a particular home loan. Request home loan quotes from a variety of banks and finance companies, as well as online lenders. Your credit rating and the collateral that you use can also have an effect on the interest rate that you are charged on your home loan so make sure to give all the necessary information.

Home loans in South Africa can either be “fixed rate” or “variable rate” loans. A fixed rate means the interest rate charged is fixed for a specific time i.e. two years or more. This option is best when the interest rates are low or to make budgeting easier. A Variable Rate is better when the interest rates are higher, because they can go down if the interest rates go down. However this rate will also go up when the interest rates goes up

Since the introduction of the National Credit Act (NCA), there seems to be a wide variation in the banks’ lending criteria, and, in some cases, one bank will approve a loan that was declined by another bank.  In this case, it is important to shop around for the best interest rate as the banks are using different models to determine whether to grant you a loan and, if so, at what rate.

The NCA places the onus on credit providers to ensure that you can afford to repay a loan or credit agreement.  In terms of the NCA, the maximum interest rate you can be charged on a mortgage bond is the repo rate multiplied by 2.2, plus five percentage points. However, most people qualify for a mortgage bond at between 1.6 and 1.8 percentage points below the prime rate.

In practice, people who are regarded as really good credit risks (high earners with low debt and a good credit record) receive 2.5 percentage points below the prime rate, while those who are not a good risk can obtain up to four percentage points above prime. Depending on your profile, the banks may be slightly negotiable within this range.

All the banks say they will not change the interest rate you are paying on an existing home loan as a result of the NCA. Your rate will change only if it is linked to the prime rate and the prime rate changes.

With new loans, as was the case with loans in the past, the banks say the interest rate they charge you depends on your individual risk profile – how much you borrow, how much you earn and your credit record.

By choosing Mortgage Plus for a loan, you will get that continual service to make sure you are getting the best deal possible.

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

When looking for a new home loan or wishing to transform your existing one, there is no better place to turn to than Mortgage Plus. As specialists in the home loan industry in South Africa, Mortgage Plus will give you the best assistance and expert home loan advice to ensure that you in turn make the right decision regarding a home loan that is best suitable to your personal finances and needs; and you will therefore benefit greatly from utilising the outstanding services which Mortgage Plus has to offer in terms of guiding you through the entire application process.

The finance industry is complex and often very intimidating to those who have little or no experience and as such Mortgage Plus was started to assist in the transformation of existing home loans by giving aid in getting bond extensions and credit extensions; the reason for the rampant growth of this company’s popularity among existing home owners in South Africa who desperately require Mortgage Plus expert advice and assistance.

On Capital Gains Tax

Capital Gains Tax was introduced on 1 October 2001, needing to be paid by all South African residents and non South African residents who make a profit or loss when selling fixed property of a capital nature located in South Africa.

What Capital Gains Tax means fro home owners is that taxpayers, including individuals, trusts, companies and close corporations, will be taxed on the profit they make when they sell an asset or property of a capital nature. So basically, Capital Gains Tax is a tax on the resale of assets.

In most cases, provided that the property is smaller than two hectares and the profit is less than R1.5 million, Capital Gains Tax will not affect your primary residence. On the other hand however, homeowners will be liable for Capital Gains Tax on second properties or holiday homes that are not occupied as a primary residence or on any portion of a primary residence that is used for business purposes. Furthermore, Capital Gains Tax does affect all properties registered in the name of a close corporation, trust and company.

Mortgage Plus: Expert Home Loan Assistance

Mortgage Plus knows this information and, by utilising their home loan assistance, you can ensure for yourself that everything that needs to be is taken care of with regard to all costs being paid, etc. To elaborate, with Mortgage Plus on your side you will experience no glitches, and the process of applying for a new home loan or transforming your existing home loan by getting a bond extension or credit extension will run smoothly.

So if you are looking to get a credit extension on your home loan or wanting to apply for a new home loan, there is no better place to turn to get the expert advice and quality assistance you will need to ensure that everything is taken care and that the best possible decision is made in terms of the perfect home loan for you as an individual.

Mortgage Plus is here to help you. Get in touch with us now and experience the pleasure that it is of having an expert on your side every step of the way. www.mortgagepluscc.co.za / 011.327.4489