Mortgage Refinance

If you are stuck by paying your monthly bills and looking out for some rates on your mortgage loan, refinancing is there to help you out. You can also consolidate your debts and pay your debts much faster and easier than before. All these can be done through mortgage refinancing. You should first know what mortgage refinancing is before we start.

Mortgage Refinancing

Mortgage Refinancing gives you the opportunity to use a mortgage loan to replace your current mortgage bond. You will be able to replace it, with favorable terms and rates that you can afford. The mortgage bond is taken against the same property as collateral. This may not or may exceed the current loan balance.

You can also use the left out cash, after you have paid for the current mortgage. This is a great advantage because you get some extra money to use it for your other requirements. This type of refinancing is known as the cash out refinancing.

On the other hand, getting the exact amount as loan and replacing the balance is called mortgage refinancing. Now that you are clear with the meaning of refinancing, you should also know that you can save a lot through it.

The amount that you get as loan is given at a low interest rate and this saves you money and leaves you with less stress. The terms seem to be very flexible and meet all your requirements. If mortgage refinancing can help you to save your cash, why not go for it and pay down all your existing loans.

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

Buying and ‘bonding’ together

Aspirant buyers struggling to get mortgage bond approval might look at a co-ownership agreement with friends or family. The banks are quite happy to lend a hand.

Although bond applications in the first quarter of this year reached their highest level in 3 years, aspiring home owners are still struggling to get mortgages.

As a result, applying for a joint mortgage bond is becoming more of an attractive option for people trying to enter the residential property market. It is not unheard of for couples, whether husband and wife or about-to-be-weds applying for bonds, but the current trend goes beyond this – with friends grouping together to source finance and entering into joint ownership agreements.

Absa Bank’s home loans division says that it does not restrict the number of members.
Furthermore, the lending banks are looking favourably on such arrangements as an alternative to suretyships, under which recovery of debt in cases of default is often difficult. Now they prefer guarantors signing as co-owners.
In a recent poll conducted by mortgage originators, 38% of people surveyed believe that partnering with friends or relations to get a bond is a positive option. 36% of those surveyed were opposed to the option, feeling that it posed too much of a risk, and 26% believe that it should be considered but only if absolutely necessary.

Prime market for co-ownership is the first-time buyer, but it may also appeal to investor groups wishing to spread their risk. Those perceiving buy-to-let opportunities ahead as rents continue to rise are a case in point. Others thinking of taking the plunge into a coastal holiday home, where prices are at their lowest for years, may also view co-ownership with friends or family as a good bet.
However, there are some serious issues with which to contend – and a lot of ducks to be in a tidy row acceptable to the banks before a co-ownership mortgage is a proposition.
First and foremost is the need for all partners to be fully in agreement with the venture – percentage of co-ownerships, rental patterns if being shared; rates, taxes, levies and running costs/insurances and so on; letting contracts if the purchase is a buy-to-let venture; and a formal contract/partnership agreement, legally binding on all parties. The presence of a watertight contract will safeguard against default by any party.

The contract must cover such situations as the death of one or more co-owners, or if one of the partners experiences financial difficulties. Absa home loans also points out that the minimum legal age for ownership of land in SA is 21.

Ideally, the partners should have life policies with linked beneficiaries, similar to “key-man” policies in business practices. These will cover a partner’s share of the home loan if a death does occur.
Another important issue is the structure of an exit strategy – perhaps due to a partner’s changing circumstances – or even a marriage or divorce. Absa also stresses that if one or more partners in the co-ownership agreement wants out, the loan must be re-evaluated.

Meanwhile the number of mortgage bond applications in March was the highest level for nearly 3 years, reports Mortgage Plus. Nevertheless, they are still only 36% of the application volumes recorded at the peak of the market in May 2007 – which drives home just how the market has collapsed.

The welcome news is that the level of approved home loans also reached a high in March. According to ooba CEO Saul Geffen: “Ooba has experienced consistent month-on-month increases in application intake since the beginning of the year; we expect to see this growth continuing.”

According to other indicators, the average approved bond size increased 7,4% year-on-year. The average deposit as a percentage of purchase price fell 23,9% y/y to the equivalent of 15,6% of the purchase price.
The average decline ratio during March also fell – by 8,1% y/y from 52,8% to 44,7%. An additional positive indicator is that the effective overall approval rate continued to show a year-on-year increase of 5,6% to 64,5%.

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