If you are considering taking a new home loan, you should also take into account the factors that influence the rates. There are some factors that are within your control.

New Home Loan: Factors to Consider

One should consider the following factors while applying for a new home loan:

Debt to Income Ratio: Before taking a decision on the amount of loan to be extended, every lender calculates your debt to income ratio. This is calculated by taking into account your monthly debts and income. A high debt to income ratio means that a considerable part of your income is going towards the payment of your existing debts, which signifies high risk for lenders. If you have a high ratio then the interest rate is likely to be higher.

Payment History: You can improve your chances of getting a good interest rate by paying your bills on time. These could be credit card bills or car or rent payments. A single late payment can affect your credit history.

Property Type: The type of home loan that you are entitled to is influenced by the kind of property against which you take the loan. Property may be a single family home, multi family home or condominium. The rates are lower for properties that bear lesser risk.

Loan Amount versus Property Value: The lender will compare the loan amount with the value of the property to calculate the LTV (loan to value) ratio. If this ratio is high your mortgage will carry higher risk, which will end up in a high interest rate on your home loan.

Loan Amount and Duration: The higher the loan amount, the higher will be the interest rate. Moreover, the longer the duration of the loan, the lower will be the rate of interest on your home loan.

Closing Costs: If you do not wish to pay all the closing costs, then you can expect to pay higher interest rates. This is done to compensate for the closing costs.

Down Payment and Points: You can get good interest rates by paying down at least 10% of the loan. You can also pay points to lower the interest rates by paying your principal and lowering your monthly payments.

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

Nedbank Home Loans

Nedbank home loans cater for a variety of individuals within South Africa and include four different types of home loan choices.

• Original home loan
• Buy to let home loan
• Building home loan
• Home vision home loan
• Original Nedbank home loan

Qualifying criteria includes individuals earning at least R2 500 in monthly household income and must have a clear credit record. Property value to a minimum of R100 000 needs to be obtained prior to applying to the loan.

Individuals may furthermore repay their loan to up to 30 years with interest rates being fixed or variable. Other flexible facilities with this home loan include options to apply for

a re-advance where individuals who have paid off some of their loan may apply for the same amount.
NedRevolve facility which allow individuals to withdraw the funds which they have paid in surplus on their home loan.
an accelerated payment option where individuals may pay more than then minimum installment in order to speed up repayment of their home loan.
With the ever changing markets home owners with this loan option may also apply for a higher loan amount if the value of the property has increased.

Buy to let home loan

This loan is given to individuals who want to invest in a property with the aim of renting it out to other individuals. Qualifying criteria includes individuals having to earn at least an income of R30 000.00 and should have a clear credit record. A property value with a minimum amount of R150 000 will only be considered.

Building home loan

Qualifying factors include that individuals earn at least R2 500 per month and have a clear credit record. Individuals can only apply for this loan when a property with a minimum value of R150 000 will be build. Builders must be able to proof that they are NHBRC approved.

Home vision home loan

When the value of your property increase home owners may apply for a home vision loan. The difference of the original loan and the new property value may be utilized for most purposes if approved.

Home owners are encouraged to apply for this loan instead of a second mortgage as costs levied are much lower. The minimum property value has to be R100 000 to apply for this loan.

Nedbank branches can be found all over the country but individuals may also logon to the Mortgage Plus website to apply online in the comfort of their own homes. The website is very informative and individuals may also make use of the home loan calculator to determine the value of the home loan they might qualify for, repayment terms and installment amount.

All clients will be subject to a credit check and affordability in terms of the NCA (National Credit Act), and all properties will be evaluated prior to approval.

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