Wise individuals will always attempt to get the best value for their money, and one way of doing so is to apply for home loans rather than renting from someone else.

In South Africa individuals can make use of estate agents or use an online loans service to look for their desired home. The internet has transformed the way everyone does business and individuals can make use of online home loan or bond calculators to determine the home loan value they can qualify for. Off course other factors such as the credit rating of individuals will also influence the amount and interest rate charged when the actual home loans application is submitted.

Individuals are always advised to look beyond the dream home and should look at other factors such as the area in which the property located.  Factors such as the market value of surrounding properties will give individuals an idea of how easily they will be able to sell their property in future if they wish to do so.

Individuals normally have three options when wanting to apply for any home loans, and can either directly make appointment at the bank, make use of an estate agent or make use of bond originators.  Estate agents receive commission from the seller when a sale has been made whilst bond originators receive a fee from the bank directly.

Bond originators works with major banks on a full time basis and very often there are greater advantages in making use of bond originators then taking the process into your own hands. Such advantages include better home loan rates as bond originators submit thousand of home loan applications annually and therefore have better negotiating power.

Other than lower rates, bond originators take the hassle out of a home loan application and will handle the whole application process from beginning to end.  They will handle all the paper work and individuals will never have to speak to any bank directly.  Their service includes a detailed explanation of the home loan application process so individuals will never be left in the dark.

Using a bond originator comes at absolutely at no charge to the individual and originators will also obtain various quotes from various home loan financial institutions to ensure that the best value for money is given.

There are five important tips that individuals should consider when considering home loans:

1. Ensure healthy credit rating by making regular monthly payments on time to all creditors.
2. Reduce monthly expenses and by increase your monthly disposable income with as little as R1300 per month, could increase your home loan with R100 000.
3. Make use of bond originators who will be able to obtain quotes from various home loan institutions at the best interest rates.
4. Obtain a pre-approved home loan.  Mortgage Plus can provide a certificate of the home loan value they are willing to give you which could speed up the purchasing process of your desired home, and will give you an advantage over other possible buyers who show interest in the same property.
5. Be realistic. Even if the bank offers you a high home loan value it doesn’t mean you have to use the full amount to purchase a property.  Additional costs such as rates, taxes, levies and insurance will also be added to your monthly home loan installment.

Individuals seeking more information on home loans in South Africa can enquire below:

Mortgage Plus offers a wide range of advice on different bond options and further advice on the above. Please call us for further information on:

Complete this short form online

Call us on 011.327.4489

Email: morne@mortgagepluscc.co.za

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The SA Reserve Bank (SARB) has cut the repo rate by 50 basis points to 5.5 percent, governor Gill Marcus said on Thursday. 

Standard Bank and Nedbank have already announced that their prime rate would now fall to nine percent, in line with banks’ traditional responses to repo rate changes. 

This was the lowest it had been in 30 years. Marcus told a media briefing. 

She emphasised that when making its decision on rates, the Monetary Policy Committee’s (MPC) focus is on the “situation that might exist 12 to 18 months hence”. The MPC found the risks to the longer term inflation outlook to be “fairly evenly balanced”. 

“The domestic economic recovery remains fragile, and the adverse global developments make the growth outlook more uncertain,” she said. 

“The view of the MPC is that there is room for further stimulus, given the weakness in the supply side of the economy.” 

The decision to lower rates was based on various factors, including an improved outlook for domestic inflation. 

“Since the previous meeting of the Monetary Policy Committee (MPC), the outlook for domestic inflation has improved further against the backdrop of a continued negative domestic output gap and sustained strength in the exchange rate of the rand,” said Marcus. 

The governor said they expected an average inflation rate of 4.3 percent for 2010. This fell within the target range of three to six percent. 

“Inflation is then expected to remain at an average of 4.3 percent in 2011 and to increase to 4.8 percent in 2012,” she said. 

Marcus said the main risks to inflation included rising wages, and increasing food and petrol prices. 

“Global food prices have been affected by adverse weather conditions in a number of regions, but the impact on domestic prices has been counteracted in part by the rand exchange rate trends and the bumper maize crop. 

“The exchange rate has also moderated domestic petrol price increases.” 

Marcus said the global economic recovery “has continued in an uneven manner”. 

There were risks to the growth of advanced economies including the US, Japan and the euro area. 

“The recent resumption of quantitative easing, against a backdrop of deflation fears, indicates that monetary policy in the US is likely to remain highly expansionary for some time.” 

Quantitative easing refers to a strategy of the US Federal Reserve to inject money into the US economy to make borrowing cheaper so that more people and companies can access cash, then spend it and thus stimulate the economy. 

Marcus also highlighted concerns about Europe, particularly about whether solvency of the Irish banking system and the sustainability of Irish public sector deficits could affect the rest of Europe or even have a global effect. 

“Apart from the risks to the fragile global recovery, there are also significant risks to financial stability emanating from these developments in the advanced economies.” 

These risks included the risk of a sudden reversal of capital flows to emerging markets. 

“The quantitative easing has continued to have spillover effects on emerging market economies. 

“The search for yield resulting from this increase in liquidity has implications for the exchange rates of the recipient countries. South Africa has been no exception in this respect and appreciation pressures are expected to persist for some time, in the absence of renewed bouts of global risk aversion. 

“The exchange rate therefore remains a downside risk to the inflation outlook.” 

Marcus said that since the previous MPC meeting, the rand had appreciated by over three percent against the US dollar. ”This has been despite lower domestic interest rates and the higher pace of reserve accumulation in the past two months.” The outlook for domestic growth remained subdued.

“The forecast of the Bank is relatively unchanged since the previous meeting of the MPC, with GDP growth remaining at 2.8 percent for 2010 and expected to average 3.3 percent and 3.6 percent in 2011 and 2012 respectively.” – Sapa

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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

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