The mortgage origination value chain consists of the home buyer, estate agent, mortgage originator, attorney and the lender (bank).

1. Seller
The seller is the registered owner of the property to be sold. The seller could:
• Approach an estate agency to sell the property on his/her behalf
• List the property for sale through a direct selling mechanism on the Internet
• Sell the property directly to a prospective buyer.

2. The buyer
The buyer of a property enters into an Agreement of Sale with the seller of the property and could pay the purchase price to the seller in cash or by obtaining a home loan or mortgage through a bank. A buyer is also a person buying a stand and building a dwelling on the stand.

3. The estate agent
The estate agent is the starting point within the value proposition to the homebuyer. Although appointed by the seller, and primarily looking after the interests of the seller in terms of listing the property and finding a suitable buyer as close as possible to the seller’s asking price, the estate agent is compelled to operate and advise homebuyers within the guidelines and policies of the Estate Agency Board, the Regulatory Body for Estate Agents. The estate agent adds value to the homebuyer in finding a suitable property to satisfy the needs of the homebuyer.

4. Banks
The bank is also referred to as the lender. When the originator submits an application on behalf of the homebuyer to the bank, the bank will assess the application based on the creditworthiness of the applicant, the affordability of the loan for the applicant and the security that is offered for the loan in terms of the value of the property to be mortgaged. Based primarily on the risk the mortgage loan represents, the bank will offer the home buyer a suitable interest rate. The normal repayment period for a home loan is 20 years. After registration of the home loan, the applicant becomes the client of the bank.

5. The attorney
By law a conveyancing attorney is the only person who may register property transactions in the Deeds Office.
When there is a mortgage bond registered over a property, and the purchaser has procured a loan secured by a mortgage bond to pay the whole or part of  the purchase price, three basic types of transactions are applicable:

• The cancellation of the seller’s existing mortgage
• Simultaneously, the transfer of the property into the new owner’s name
• And also simultaneously, the registration of the purchaser’s bond

There is a fourth possibility – that the property transactions may be  in the sense that, for example, the purchaser has sold another property, and the proceeds of that sale, or part thereof, are used to pay the purchase price of the property he/she is now buying.

6. Mortgage originator
A mortgage loan originator or mortgage broker is a licensed professional who arranges mortgage financing for potential homebuyers. While a loan originator usually represents a particular mortgage company, the mortgage broker may possibly represent more than one lender. In either case, the job is to assist the borrower by beginning the borrowing process through the completion of a loan application, and gathering of the necessary documentation, such as income statements and credit reports.

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

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STEP 1 – DEFINE NEEDS FOR YOUR NEW HOME

Congratulations on your decision to purchase a new home! Your first step toward buying your new home will be to analyze your needs. Your real estate agent can help you determine exactly what you want your new home to look like and how it should function for you and your family.

First, write down why you are looking for a new home. For example, are you currently renting and would like to begin building equity? Maybe you recently married and have outgrown your current residence. Or, maybe you received promotion that requires you to move to a new city. These factors will all have a bearing on how you approach your home search.

Second, establish a time frame for buying your home. Depending on your reasons for wanting a new property and the current state of the market in the area you are looking to buy, you should be able to come up with a rough guideline.

Finally, you probably have a mental picture of what your dream house looks like. Turn these ideas into two lists: one should describe your dream home and the other should list features that are absolute must haves. In a perfect world, your new home would fulfil both lists 100 percent, but it is more likely the two lists will turn into a list of priorities, as you get clearer about what you want and what is available.

STEP 2 – PRE-QUALIFICATION

As a major role-player in the property market, Mortgage Plus has what it takes to get you the best interest rate in the current market.  We are associated with the four major banks in South Africa being ABSA, Standard Bank, FNB and Nedbank.  We could also assist you with Old Mutual Bank as an affiliate of Nedbank.  Please contact Morne Prinsloo at 011.327.4489 to assist you free of charge with the process of getting your finances needed to purchase your property.  This service is offered free of charge to anyone anywhere in South Africa.  Confidentiality is imperative and you will be directed to our financial consultant who would assist with your application accordingly. Now that you know what you want in a home, you need to find out what you can afford. There are two ways to go about this: pre-qualification or pre-approval for a loan. Either way, you can contact your agent about choosing a mortgage company. Prequalification is the simpler of the two processes. It can even be done online or over the phone. When you contact a mortgage company, they will ask you for some basic information about your finances.

How much money you earn, your debt load, etc. They will take this information and give you a rough estimate of how much of a loan you might qualify for. Pre-approval is more a more in-depth process. The lender will perform an extensive check of your finances including your credit rating, whether or not you’re a first-time buyer, what your debt load is, how much money you have to put as a down payment, etc. This figure will be a much more reliable estimate of what you can afford.

In most markets, pre-approved buyers are preferred over those that are merely pre-qualified. Being pre-approved lets the seller know you have gone through an extensive financial background check and there should be no unexpected obstacles to you buying their home.

STEP 3 – NEIGHBOURHOOD INFORMATION

Now that you have your list of needs and wants and know how much you can afford to spend, it’s time to look at some houses, right?!  Well, don’t forget, people don’t just buy a house; they buy the neighbourhood the house is in. Think about that…if you found the perfect house but it was in a neighbourhood that was not to your liking, would you make an offer on it?

You will need to make another list for the type of area you want to invest in. Consider things like drive time to work and major destinations, amenities such as swimming pools, tennis courts, parking, etc., area schools, churches, shopping centres, and the demographics of the surrounding area.

STEP 4 – HOME SEARCH

At this point you will have a good idea of what you can afford and the type of area you will want to invest in. Taking that information into consideration, you are ready to embark on your home search. If you don’t know much about the city to which you are moving, you will want to start by finding areas that meet your criteria and then narrowing your search to particular properties in those areas.

There are a few ways to go about this. Possibly the most efficient way to find homes is to allow your real estate agent to keep you up-to-date on available properties that meet your criteria, and then allow your agent to screen them for you. When your agent presents you with a home that interests you, he or she can arrange for you to tour it at your convenience.

You can find available homes by reading local real estate publications, contacting local estate agents, looking on the Internet, or driving through neighborhoods that meet your needs.  Driving around a particular area looking for a home that is for sale is good because you can actually see the house, but it can be very time consuming.

STEP 5 – MAKE AN OFFER

Now that you’ve found your dream home, it’s time to make an offer. Your real estate agent will help you determine the offer price by reviewing recent sales of homes that are similar in size, quality, and conveniences and amenities. Your real estate agent will advise you on how to create an offer that will have the best chance of being accepted.

After consultation with you, your agent will create a written contract with your offer that meets all the legal requirements. This document details what needs to be done by both parties to execute the transaction. It should protect the interests of both parties and will ensure your financial position as the buyer.

The contract should include, but is not limited to, the following:

• Parties involved.
• Legal description of the home.
• Offer price.
• Financial arrangements.
• Certificate of electrical compliance and who will pay for it.
• Amount of the deposit.
• Appliances and furnishings that will stay with the property.
• Steps to be taken if there is a breach of contract.
• Agent’s professional fee.
• The period by when the guarantees must be given and bond approval date.
• Date of occupation and occupational rental (if applicable).

Remember the legalities of this phase are very important. If you have any questions or concerns, be certain to address them with your real estate agent right away.

STEP 6 – NEGOTIATING TO BUY

Once your offer is made you may need to negotiate with the seller to reach an agreement. Keep in mind almost everything is negotiable when you are buying a house. This can give you a great deal of leverage in the buying process, that is, if you have adequate information and you use it in an appropriate manner.

Some things you may negotiate:

* Price

* Financing

* Repairs

* Appliances and fixtures

* Occupancy time frame

Counter offers happen frequently. Remain in close contact with your real estate agent so you can quickly review any changes from the seller.  Remember…bargaining is not a winner-take-all deal. It is a business process that involves compromise and mutual respect.

STEP 7 – COORDINATION OF THE PROCESS

After your offer is accepted, your agent will help you coordinate the activities to get the property registered in your name.  A comprehensive checklist of activities of the process is also available on this website.  Your estate agent is the ‘glue’ that keeps the whole transaction together and coordinates every step in the registration process together with all the other role players such as attorneys, financial consultant, electrician, valuator, etc. Your agent will make sure these vendors have access to the property to perform their procedures and will oversee the execution of those procedures on your behalf.

STEP 8 – SIGNING OF DOCUMENTS

As the process continues you will need to be in contact with the transfer attorney (and bond registration attorney if you applied for a bond) to make sure all necessary documents are signed.  These days, buyers and sellers do not even have to be in the same room to sign the documents.  Thanks to the Post Office and other courier services, signed paperwork can be delivered overnight to both parties.

STEP 9 – REGISTRATION OF A HOME

Registration is where ownership of the home is legally transferred from the seller to the buyer. It is done at the deeds office and a transfer conveyancer presents the documents at the deeds office on behalf of the parties concerned.

STEP 10 – POST-REGISTRATION

Congratulations on the purchase of your new home!

Now that you have taken ownership of it you will need to have your water and electricity, perhaps levy (if in an estate or security complex) and telephone set up. Also be aware of typical homeowner expenses such as Homeowners Association fees and municipal rates and taxes and budget for them accordingly.  Enjoy your new home.

CONTACT US

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

www.mortgagepluscc.co.za