Banks’ methods of handling bond applications questioned

Bank-bashing (by no means always justified ) has become a popular pastime in SA – but there is one serious cause for concern and that is the banks’ methods of handling bond applications, says Clarke.

“Almost daily,” he said, “we pick up complaints about the way mortgage bond applications are handled by the banks.”

The big four SA banks, he said, are fortunate to have many exceptionally loyal clients – and one result of this is that often these clients will reject any help from bond originators and will instead go directly to their own bank.

Here, said Clarke, after an initial meeting with a consultant, who is not always an expert in bond finance, they can often find themselves having to track the progress of their bond via a call centre.

This, says Clarke, can be a totally impersonal experience.

“The client finds himself dealing with a disembodied voice on the end of a line – and this bank representative voice is likely to have no concern or compassion for the client’s position.”

In the worst cases, said Clarke, the bond gets seriously held up or even lost – sometimes forcing the applicant to start all over again.

“It goes without saying,” commented Clarke, “that this can result in the buyer losing out on his dream home and the seller having to start the sale process all over again.”

The (sometimes) unsatisfactory bank performances, said Clarke, date from the time when bond origination caught on and the banks found that they could leave much of the paperwork to the originators. This, in turn, led to their cutting back on staff numbers.

Now, said Clarke, they are on a different tack and are trying once again to channel more applications directly to themselves.

“By and large,” he said, “this does not work to the benefit of the applicant. If, however, he approached a bond originator  to apply to several banks to get the deal best suited to the client.”

“The importance of this cannot be over-emphasised. “It is perhaps the main reason why Mortgage Plus Finance is achieving a hit rate 10 to 15% above the SA average and building such a good reputation for itself.”

“All in all, therefore, I am inclined to feel that banks must foster rather than try to eliminate originators.”

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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.

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With house prices firmly back on an upward trend and banks beginning to relax their lending criteria for home loans, consumers are increasingly looking to get back onto the housing ladder.

As the property market becomes more competitive, however, it is vital for consumers to make sure they are well prepared and can act quickly when an offer is accepted.

Craig Deats – has the following advice for potential homebuyers when applying for a home loan to ensure they have the ultimate opportunity for success on their bond applications.

1. Make sure you are aware of all the costs involved in buying a home. In addition to arranging a home loan and paying a deposit there are a number of other costs involved including legal costs, transfer duty, bond registration fee and bank charges. These will need to be paid in order to complete the process.

2. It is advisable to have a clean credit record before applying for a home loan. As a result of the National Credit Act and current market conditions, banks have tightened their lending criteria and a negative credit record may impact the result of your home loan application.

3. Provide your bank or bond originator upfront with all required information and documentation requested. Each bank has their own set of criteria so ensure that you have met the requirements of each lender.

4. Make use of a reputable bond originator, who can assist you by facilitating bond negotiations with all major lenders in one simple process from prequalification to registration, with less hassle and minimal paperwork. They also provide regular feedback of progress on your application.- www.mortgagepluscc.co.za 

5. Shop around with multiple lenders. According to the latest statistics, 19.8% of applications in January 2010 that were declined by one lender were approved by another, indicating that it is important to approach multiple lenders to ensure a positive outcome on your home loan. Shopping around also ensures that you get the best rate on offer.

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For more assistance with regards to Applying for Home Loan Finance .
Email: morne@mortgagepluscc.co.za
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