Making your Home Loan work for you

A home is a serious investment and, like all investments, it needs to be managed properly in order to ensure that you get the best possible return. But few people, once they’ve had their home loan registered and start repaying the loan, give their most important investment another moments thought. Yet there are a number of important steps that a homeowner can take to ensure that their hard-earned money is being put to good use:

Increase your home loan repayment:

When you borrow money “Home Loan” to purchase a home you are in effect taking out two loans. The first loan is to repay the capital amount (known as the principal sum) and the second loan is to repay the interest charged over the period of the loan. The majority of the money you repay in the first years of having a home loan goes towards paying back this interest, which will only marginally reduce the principal sum.

In South Africa, interest is generally calculated daily on your mortgage. In effect, this means that the amount you owe the bank increases every day. Because of the nature of compound interest, regular additional repayments made at the beginning of your loan term will have a much greater effect on the cost of your home loan than if you start paying extra cash into your home loan account five or ten years down the line. However, even if you are already a number of years into your loan term, you can still make a considerable saving by paying additional money into your home loan. By increasing your monthly instalments, you’ll reduce the term of your home loan, which means that you won’t be paying heavy home loan instalments in later years. The result is that you will have paid less money in interest over the term of the home loan.

There are a number of easy ways that you can put additional money into your home loan without really feeling the difference in your pocket:

• Put the additional income you receive from your annual salary increase into your home loan
• When interest rates decrease contact your lender “ Banks Home Loan Department” and ask them to maintain the instalment that you were paying prior to the drop on lending rates
• Put a portion of your annual bonus into your home loan, you may put extra money into your home loan anytime you want to. Every little bit helps. Making a prepayment ‘ Home Loan Deposit’ when the loan registers is particularly helpful, as you will reduce the capital amount immediately, significantly reducing the total interest payable over the term of the loan.

Use your home loan as an interest – bearing savings account:

Banks are in business to make profit so it makes sense that they charge a higher interest rate to people borrowing money from them than they do to investors who deposit funds with them. For example you might be receiving 2% interest on a positive balance for money in your savings account, but are probably being charged a much higher rate for the money you’ve borrowed to pay off your home loan.

By depositing your savings into your home loan, you are in effect receiving the interest rate that the bank charges you on your loan as positive interest on the money you invest For example, if you have a home loan for R1 million, and you deposit an extra R100 000 into your home loan, you are now no longer being charged interest on R1 million, but rather on R900 000. The money you save in interest over the time that you keep the R100 000 in your home loan is the positive interest you are in effect receiving on the money you’ve deposited. Plus you can withdraw this cash when you need it without being penalised ‘Banks Terms and Conditions Applies’

For further information contact Morne Prinsloo on 011 327 4489 or email morne@mortgagepluscc.co.za

If you would like to know more about your home loan services and mortgage requirements please phone the Mortgage Plus Head Office on:

Attached please find the Home Loan Application Form * - Short Home Loan Application Form

0861.11.11.93

info@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Contacting a Bond Originator to do your home loan rather than trying to go directly through to the Banks

Before you apply for a loan, it might be best to contact a bond originator like Morne Prinsloo the (CEO) at Mortgage Plus cc that will negotiate the terms of the loan to ensure that you get the best possible deal. Applying for a home loan / mortgage on your own might be a complex and tricky task and a bond originator can assist you in speeding up this process and raising your chances of having the loan approved in a very short amount of time.

Mortgage Plus Bond originators provide an invaluable service to the South African public when it comes to applying for a home loan. We will be able to assist you in making a sound financial decision regarding your future by helping you choose a loan that is practical and affordable and helping you to avoid the common pitfalls of applying for and accepting the first mortgage loan that comes along. Obtaining the perfect home loan for your financial situation takes careful consideration and knowledge of the home loan and financial industry in South Africa, you can obtain all of this by contacting Morne Prinsloo a bond originator at Mortgage Plus on 0861 1111 93 before applying for your loan.

A bond originator like Morne Prinsloo plays an important role when it comes to applying for a home loan. A large percentage of all home loans in South Africa are generated through this system because they assist with the entire process, from start to finish. Morne will apply for a home loan at many banks and negotiate low interest rates on your behalf and with no costs to you.

At Mortgage Plus Bond Originators we know everything there is to know about home loans and can become a vital link between the bank and you. They will submit your application to many banks and will usually do business with those that offer the applicant the lowest interest rates. In turn, they receive a fee from the Home Loan Department of the bank for bringing them new business.

Banks are becoming more bureaucratic these days because of the economic downturn in the world. In this regard, they will usually require a mountain of paperwork and a motivation as to why they should lend you the money. Mortgage Plus Bond Originators is aware of this and can ensure that you send in the correct documentation such as bank statements and a payslips, together with your application.

Mortgage Plus is a well-established originator company that is linked via the internet to all the major banks, we are able to see on the system how far your application has progressed and we are also able to find out the reasons for delays or why an application was declined by speaking to the right people.

Another important aspect of using a bond originator like Mortgage Plus is to help you pre-assess your finances to ascertain whether you are likely to qualify for a loan. We will also help you calculate the maximum amount you can apply for by taking into consideration your income status. They do this by calculating assets and liabilities, together with your monthly expenditure. Once all these factors have been considered, then an accurate assessment can be made on the amount of money you can apply for at a bank.

The thrill of buying a new home is not easily matched and many people lose their focus when it comes to financing the property. Additionally, if more than one person makes an offer on the home then you stand a great chance of losing out because you are not using an originator like Morne to speed up the process.

A Mortgage Plus bond originator will continue assisting you with all the legalities until you become the official new homeowner.

If you would like to know more about your home loan services and mortgage requirements please phone us on:

Attached please find the Home Loan Application Form * - Short Home Loan Application Form

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za