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

Residential sales improving – but bond negotiations not

Another high profile figure in the property industry, Michael Bauer, managing director of IHPC (Pty) Ltd, has said that he finds the methods by which banks issue – or do not issue – mortgage bonds to be difficult to understand and lacking in consistency.

IHPC markets and sells homes at Bardale Village near Kuils River. Bauer says that his sales team there has learned what criteria the different banks apply in assessing a client and they ‘go the extra mile’ to ensure that all their applications are fully compliant. As a result, said Bauer, a high percentage of Bardale Village’s applications are successful.

The Bardale Village sales team’s checks, said Bauer, include affordability checks, payment profiles, credit scoring, and full credit checks. These are very similar to those used by the banks. Often when the rejections come through, he said, his staff cannot identify any reason for their failure.

“In a country that needs housing as desperately as South Africa does,” said Bauer, “these rejections and delays are especially frustrating – and, of course, they cost the developers very large sums of money.”

The good news, said Bauer, is that the effect of the lower interest rates, which always take six to nine months to become evident, can at last clearly be seen. This year sales enquiries at Bardale Village have been 70% up on the last quarter of last year. However, the stricter lending criteria applied by banks and the National Credit Act have raised the required earnings threshold for potential buyers at Bardale Village: to a combined salary of about R12,000 per month, he said. The applicant’s monthly expenses and net surplus (i.e. net income less expenses) are also taken into account, as is his credit history.

Most banks, added Bauer, do have a special niche product for truly affordable housing and on these the interest rates are set at well below prime and in some cases fixed up to five years. This, he said, is a genuine contribution to the alleviation of the housing shortage and should be exploited by first time home buyers who qualify.

However, the upper limit on the housing and income to qualify for these bonds tends to make the task of the developer very difficult. For example, where a R12,000 per month income is required and the loan amount may not exceed R400,000. In practice, said Bauer, with land prices and construction costs at their current levels, it is almost impossible for some developers to produce a suitable product at this price level, although at Bardale it was achieved.

Experience, he said, has also shown that it can be unwise to mix income groups in one area – the more affluent feeling that the lower prices let down the tone of the estate. - IHFM Press Release

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

www.mortgagepluscc.co.za