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

If you want to buy property, don’t dally. The present favourable buyers’ market is not going to remain favourable forever. In fact, if the property, home loan  and banking industry experts are correct, the tipping point will be reached soon and when it does, the upswing could be breathtakingly quick.

Projections done by Absa Home Loans indicate that the price of residential property could increase by as much as 60% between the end of 2009 and 2014. This means that a 220m² R950 000 141m² house is likely to cost around R1.5 million in six years time.

But, there is a conundrum to solve. Although the current adverse property market conditions may have served to make your dream home less expensive, the prevailing economic conditions have made the home loan with which to fund your dream, more difficult to secure.

Fortunately, more difficult does not mean impossible. Here are five home loan tips that could prove to be of value if you decide to strike while the iron is hot.

Become credit fit: The National Credit Act made it possible for all consumers to request a free copy of their credit report from the credit bureaus each and every year. Your credit report is accorded a significant weighting during the evaluation of your home loan application: it is one of the main factors that influences whether you qualify for credit or not; it affects the amount you qualify for; and it determines the interest rate you stand to pay.

For this reason, you may want to see your credit report before the bank does. Go through every last detail with a fine tooth comb. Check whether there are items that adversely affect your rating, and be on the lookout for incorrect records. If there is anything untoward that should be amended, write to the credit bureau explaining why the changes need to be made. Remember to submit supporting documentation if you have any.

If the credit bureau in question doesn’t respond or unreasonably declines your request, you can approach the credit ombudsman for mediation. This may seem like quite a tedious undertaking, but it certainly is well worth the effort in the end.

Increase your disposable income: The criteria for whether or not you can afford a home loan have changed. The banks now consider your disposable income when they calculate the size of home loan you qualify for.

Your disposable income, which is the amount of money you have left after meeting your financial obligations every month, can be increased if you give it some thought. You could speed up the repayment of your personal loans, settle some of your other small debts, shop around to save on your insurance payments and buy a cheaper car.

For every R1 300 you save on your monthly financial obligations, you will increase your home loan spending power by a full R100 000.

Work with a mortgage originator: Securing the services of a mortgage originator is a much better idea than taking a DIY approach. The mortgage originator will look at your personal set of circumstances and be able to tell you whether you are likely to qualify for a home loan and, if you do, how much you could probably buy for.

Working with a mortgage originator improves your chances for success: They understand the idiosyncrasies of the various banks, know which paperwork to submit and how to motivate your application. Once you are approved, they will negotiate the best possible interest rates and help you through the process until your home loan is finally registered. The banks, and not you, pay for the services rendered by mortgage originators.

Obtain a pre-approval certificate: If you want to avoid disappointment, you can ask your mortgage originator to apply for a pre-approval certificate from one or more of the banks. The pre-approval certificate is an in-principle decision made by the bank to finance your purchase, and is usually subject to their valuation of the property you decide to buy.

Don’t bite off more than you can chew: Your home loan is not the only additional monthly expense you will face when buying a home. You will also have to pay rates and taxes, homeowners’ insurance and, if your existing life cover is insufficient, additional life insurance premiums. Be sure to budget for these.

You would do well to leave some headroom for further interest rate increases. You need to be able to cope with at least a further 2%, just to be on the safe side. If you want to have the peace of mind knowing what your home loan will cost for the next 18 to 24 months, consider a fixed interest rate rather than a variable one.

And remember, the journey does not end once you crack the nod from a bank. It continues and, considering that it could last for 20 years or more, becoming knowledgeable about home loans is not a bad idea.

Make a point of reading up on how you could save on the interest you pay and how you could reduce the repayment term. Also gain a clear understanding of how you should use your home loan for big ticket purchases and as a debt consolidation instrument.

Finally, remember that the mortgage industry is constantly changing, and that it is a very good practice to shop around from time to time to ensure that you are still enjoying the best possible home loan deal from your current bank.

Remember by choosing us for a loan, you will get professional advice 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