Question and Answers regarding Home Loans in SA

Q: I am in the process of buying a home and require a bond. My first thought was to apply directly with my bank, however a friend told me about something called Mortgage Origination. What is Mortgage Origination and why do I need a mortgage originator?

A: Mortgage origination is the business of negotiating a home loan with a bank on behalf of a prospective property owner. Mortgage originators give you independent advice on choosing a home loan and help you obtain it without the hassle of doing all the legwork yourself. Some originators, like Mortgage Plus, offer services that may help a buyer, like advice on estate agents in the area, how to complete the sale agreement, etc.

Because your home purchase is probably the most expensive one you’ll make in your life, the home loan itself is an important financial decision and the benefit to be gained from making the correct choice can amount to savings of hundreds of thousands of Rand over the life of the loan.

Q: I am confused. What is a Variable Rate Loan vs. a Fixed Rate loan?

A: With a variable rate loan, your interest rate is linked to the base home loan rate which moves up and down depending on market conditions. If the base rate decreases by one percent, so will your interest rate, and of course if the base rate increases so does your home loan rate.

With a Fixed Rate Loan however, your interest rate is fixed for a specified period, generally between one and two years and is generally slightly higher than the base home loan rate when the loan is taken out. A fixed rate loan protects you from rising interest rates and gives you the certainty of knowing exactly what your payments will be. Bear in mind however that it does not allow you to benefit from any decreases in the interest rate over the fixed period.

Q: My husband and I are expecting our third child so we are in the market to buy a new, bigger home but with the current interest rates and uncertainty in the property market at the moment, we really need sound advice on whether to buy a new home, build from scratch or renovate our existing home.

A: Whether you are buying an existing home, building a new one or renovating your current abode, taking the first steps towards home ownership is a daunting prospect. Take heart – no matter how intimidating that mountain may appear, scaling it will always be easier with sound advice.

Property’s primary law is position – the area in which the home is located and the market value of the homes within that suburb. Discussing the prospects with family and friends around the braai or the dinner table provides a valuable perspective on the intangible elements of local amenities, community living or double-storey homes when there is a new baby in the crib.

Building and renovating carries the guiding principle – do not over-capitalise the property relative to the neighbours. Simply put: building or extending the property into a five-bedroom mansion with an Olympic-size swimming pool in an area where the bulk of properties have three bedrooms on small plots is not economically sensible.

Conversely, renovating the smallest property in a prime area promises a long-term return that more than compensates for the renovation costs. Essentially, bathrooms and kitchens sell properties so upgrading those assets substantially improves the home value.

There is no substitute for professional advice. Mortgage Plus  is one of the country’s top mortgage originators and offers free advice to home owners and buyers. Whether buying, renovating or building, our consultants can guide you through the process step-by-step, complete the paperwork and arrange and negotiate with the banks a finance package to suit your individual needs.

By choosing Mortgage Plus 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

Home Loans in SA : When it comes to purchasing a home, you are probably very excited about the fact that you will be starting a new chapter of your life. Everything happens so fast sometimes that you might think that there will barely be any time to read through your loan documents.
You could not be more wrong though. Even though those documents are going to be long and drawn out, it is extremely important to make sure that you or your attorney go through them with a fine tooth comb. Before you even get to that part though, you will want to make sure that you are even applying for the correct loan to begin with.

There are a few types of home loans out there and it is important to make sure that you understand the basics of each in order to make sure that you are making the right decision for you and your family. Going with the wrong loan could cause you to default on your loan and lose your house. Since this is not something that you want to have happen, it is important to make sure that you are taking the proper precautions from the start.

What Types of Home Loans Are There. The loan that many people consider to be the best option is the fixed rate mortgage. This is a pretty straightforward loan. You have a set interest rate, which will never change for the period it’s fixed, and a set number of years to repay the debt. Another major loan product out there would be the variable rate mortgage.

This is a risky loan in a rising interest rate market because if the prime interest rate goes up, the mortgage company will also begin to increase your interest rate. This means that you can never predict what your payments are going to be in the future. Many people have found themselves in foreclosure simply because the payments adjusted to an amount that was too much to handle.
Interest only home loans are another option. The thing is though, during the first couple of years of the mortgage, none of your payments goes to the principal balance. If you plan on selling you home within the first couple of years then your payoff amount is basically going to be the same as the first day you took out the loan.

As you can see, there are a few different options out there for you. You really have to look through them all to make sure that you are getting the right type of loan for your needs.

If you need any more information about  Home Loans or other home loans related questions fo not hesitate to contact us on :

(011)327-4489 / www.mortgagepluscc.co.za