Mortgage pre-qualification – why it can help you close the deal

In the property game there are two ideal scenarios. The first is a serious seller who is happy to price their property competitively. The second, a serious buyer with a clear idea of what they want. In these scenarios the chances of matching buyer and seller is strong.

But what about the rest of the market? Here it takes a little bit extra, and a pre-qualified mortgage application in the hands of the potential buyer could make the difference.

Morne Prinsloo, Chief Executive Officer at Mortgage Plus Bond Originators, said it could be this reassurance, provided in the form of an endorsed certificate from a recognised mortgage originator or similar accredited financial services provider, which sways the seller or in a case where it looks like competing offers may shortly be made for the same property, he said the pre-qualified certificate could clinch the deal for the buyer.

Historically most banks were prepared to do a formal home loan pre-approval, which basically guaranteed that the finance would be made available to the buyer on request.

“The banks have moved away from the pre-approval service because it requires them to go through a complete mortgage application process with very little client loyalty when taking up the bond. Historically the pre-approval took as long as an application. This resulted in duplication and bottlenecks in approving legitimate bond applications and so the banks stopped this service,” said Prinsloo.

To aid and inform homebuyers Mortgage Plus Bond Originators introduced formal and certificated pre-qualification. This is not the absolute guarantee offered in a pre-approved scenario, but it does detail the financing options available to a potential buyer subject to them meeting the bank’s lending criteria. Mortgage Plus uses similar credit scoring models as the banks in issuing its prequalification certificates.

As a result the number of Mortgage Plus pre-qualified clients not being granted a bond when formal bank application is made, is minimal. Pre-qualification really does give both the buyer and the seller peace of mind.

For buyers there are a number of advantages. First, it introduces them to the process of applying for a mortgage. This is particularly useful for first-time homebuyers. They get a clear indication of what they will be required to show the banks on formal application, and do not feel intimidated when the formal application gets underway. Buyers also get a clear view of their budget range and can house hunt accordingly. Once they have found their house, the process of originating a mortgage for them is quicker as the bulk of the required information is already on hand.

For the seller a pre-qualified mortgage certificate indicates a serious buyer. It indicates the buyer’s ability to secure funding. The pre-qualified buyer will in all likelihood, be granted finance swiftly.

Many sellers lock themselves into a sale and then wait for the buyer’s finance to be approved. If finance is not granted, the chances are the serious buyers have moved on and the seller has to start the marketing of their property from scratch.

Mortgage Plus has invested a significant amount in the technology and infrastructure required to provide pre-qualification certificates.

“Our team can generate a certificate in no time at all, and we’d be happy to assist any buyers with the process,”

Among the clutter of speculative offers to sell, and less than serious buyers, the pre-qualified certificate sends a clear signal of intent.

That might be all it takes to clinch the deal.

For further information contact Morne Prinsloo on 011 327 4489 or email morne@mortgagepluscc.co.za

If you would like to know more about your home loan services and mortgage requirements please phone the Mortgage Plus Head Office on:

Attached please find the Home Loan Application Form * - Short Home Loan Application Form

0861.11.11.93

info@mortgagepluscc.co.za

www.mortgagepluscc.co.za

The most recent FNB Property Barometer indicates a big upturn in first time homebuyers – an increase of 35 per cent since 2008, says Morne Prinsloo, director for Mortgage Plus Bond Originators.

In 2008 first time home buyers comprised 17% of the total homebuyers and in 2011 they comprised 23%.

Prinsloo said that this shows:

1. that the banks are easing up on their lending criteria – even to the extent of three of the major banks now granting 100% loans to qualified applicants, with one bank granting up to R 2 700 000.

“This,” he said, “may or may not be in response to repeated calls from estate agents to review the criteria but, whatever its cause, we are grateful and see it as a first step towards “normalisation” of the market;

2. A revival in consumer confidence in the property market – it is noteworthy, said Prinsloo, that many first time homebuyers do not have to buy: they can continue to rent or live with friends and family. The fact that they choose to do so indicates an increasingly positive mindset regarding property in SA today and this is to be welcomed.

3. The raising of the transfer duty tax exemption to homes sold for up to R 600 000, has been another boost to first time home buying

4. First time homebuyers are encouraged by the 35-year low in interest rates

The benefits of home ownership, said Prinsloo, have been so well promoted “by Mortgage Plus Bond Originators” that we assume they will be widely appreciated. However, this is not always the case among those with a “rent-forever” outlook. It is, he said, therefore encouraging that so many people at the lower end of the housing market realise that owning a home is still the most convenient way to secure growing assets, a stable family-oriented position in society and the opportunity to “personalise” one’s domestic surroundings.

“Home ownership is good for economies and the fact that South Africa’s first time homebuyers are on the increase is good news. It could be that this emerging middle class will keep South Africa on track despite disruptive elements working to break down existing social structures and change existing economic policies.”

For further information contact Morne Prinsloo on 011 327 4489 or email morne@mortgagepluscc.co.za

If you would like to know more about your home loan services and mortgage requirements please phone the Mortgage Plus Head Office on:

Attached please find the Home Loan Application Form * - Short Home Loan Application Form

0861.111.193

info@mortgagepluscc.co.za

www.mortgagepluscc.co.za