Bond Originators and Mortgage Experts
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With hundreds of mortgage products on the market, it is not always easy to know where to go to obtain the exact bond finance you need at the time and in the circumstances. That’s where the mortgage originator comes into the picture. “However, many people are unsure of exactly what services a mortgage originator should offer and what benefits they provide.
The key function of a mortgage originator is to introduce a borrower to a lender and to act as a personal consultant in an attempt to help you obtain mortgage finance for a property. “The mortgage originator will apply to and negotiate with a financial institution in respect of the home loan on your behalf”.
A mortgage originator should have a specialized knowledge of the various products and rates available on the market in order to give independent advice with the aim of obtaining the most suitable bond from the most appropriate mortgage lending financial institution for your particular needs. They should help you assess your affordability and explain fully and in plain language the material terms which you need to be aware of to make an informed decision.
“While you are not obliged to use their services, it can make the process much quicker because of their familiarity with the process, products, assessment yardsticks and requirements of the individual financial institutions. With a mortgage originator you only have to fill out one application and they request only one set of the relevant prescribed supporting documentation, such as identity documents and salary advice slips, required by the financial institutions. They then submit the application to the various financial institutions on your behalf and try and negotiate a lower rate for you. “It is generally understood that a bond originator is able to secure a cheaper rate than if you approached the bank directly as they are on a better negotiating platform. A good mortgage originator should also follow up with the financial institutions on a regular basis and keep you informed.
Once the mortgage originator receives the various quotations they should sit down and help you to assess your options, advising you of the pros and cons of each with your particular needs in view. “Essentially the final decision should be yours after weighing up all your options and taking into consideration the advice and recommendations of the M.O. Do not feel obligated to make any specific choice.”
Apart from providing you with information on the various mortgage products they should also be able to assist you with conveyancing and related costs.
The mortgage originator is usually paid a fee or commission by the lending institution with whom the loan is taken up, so the service should be free. It should not be necessary to sign a sole mandate and if they request you to sign any agreement between them and yourself make sure you are fully aware of the legal and possible financial consequences.
“Remember they do not have control over and cannot therefore accept responsibility for credit decisions or valuations made by the mortgage lending financial institutions, it is a good idea to approach a mortgage originator before you go house hunting so that you know what loan amount you will be eligible for.
Should you have any problems complaints may be addressed to the Office of the Ombudsman for Mortgage Originators which has been set up to deal with complaints against mortgage originators who are members of the National Association of Mortgage Originators.
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
| Access Bond | You can draw money ( up to a predetermined amount ) from this type of home loan. |
| Administration Fee | This fee is charged by the lending bank to cover the initial costs of processing a home loan application. |
| Agreement of Sale | Contract stating the terms and conditions under which the property is sold |
| Assessment | This is the bank’s assessed value of the property. It will usually be done prior to the final approval of your home loan. |
| Assessment Fee | Cost of the administration work that accompanies an assessment. |
| Bona Fide | Means ” in good faith” |
| Home Loan / Bond Costs | Fees payable to the registering attorney which includes conveyancer’s fees, stamp duty and VAT. |
| Home Loan / Bond Registration | Fee payable for the registration of a home loan in the new property owner’s name. |
| Home Loan / Bond Term | Original term over which the home loan was taken. |
| Broker / Estate Agent | Person or persons who bring buyers and sellers together and negotiate contracts for them. |
| Building Loan | This type of home loan is usually issued to a buyer of vacant land for the purpose of building on the land. |
| Capped Home Loan Interest Rate | Limits the amount the interest rate on an adjustable rate home loan can change over the life time of the home loan. |
| Collateral | Assets that are required as security for your home loan. |
| Contract of Sale | This is the agreement between seller and buyer covering the price, terms and conditions of the sale. |
| Conveyance | Document used to effect a transfer. |
| Credit Profile | A report detailing the credit history of a prospective borrower that’s used to help determine borrower creditworthiness before a home loan application will be approved. |
| Deed | This is a legal document by which title of a property is transferred from one owner to another. |
| Default | Term use to denote failure to make payments on a home loan. |
| Equity | The amount by which the value of the bonded property exceeds the outstanding amount on the home loan. |
| Finance Charge | Interest charge on a home loan |
| Fixed Home Loan Rate | The interest rate on a home loan is fixed for an agreed period of time and will not change for that period even if the variable home loan rates rise or fall. |
| Foreclosure | Legal process by which a bonded property may be sold to pay off a home loan that is in default. |
| Freehold | Ownership of the property as well as the land on which the property is built on |
| Grace Period of Home Loan | Amount of time after the due date of the home loan payment in which a payment may be made without a late penalty fee being applied. |
| Home Loan Application | A statement of personal and financial information required by the bank when you apply for a home loan |
| Home Loan Plus Costs | Allows borrower to lend more than 100% of the property value to cover the registration and transfer costs. |
| Interest | Fee paid for borrowing money usually calculated as a percentage of the remaining balance of the amount borrowed. |
| Interest Rate on Home Loan | Annual rate of interest charged on a home loan. |
| Lender | Bank, Mortgage Company, or Mortgage Broker offering the home loan. |
| Mortgage Broker | Individual or company that arranges home financing for borrowers. |
| Mortgage | Agreement with the bank stating that the bank will lend you a certain amount of money in the form of a home loan that will be paid back over a period at a certain interest rate. |
| Offer to Purchase | Offer in writing from the buyer to the seller which becomes a legal contract once it is signed by all the parties. |
| Pre-Approval | Lenders firm commitment on a home loan. |
| Prequalification | Process of determining the amount of home loan you are eligible for. |
| Purchase Agreement | Contract stating the terms and agreement under which the property will be sold. |
| Refinancing | Process of paying off one home loan with the proceeds of a new home loan on the same property. |
| Second Mortgage | Additional mortgage placed on a property that has rights that are subordinate to the first mortgage. |
| Term of Home Loan | Period between the beginning of the home loan and the date the entire balance of the home loan is due. |
| Title Deed | This document gives evidence ownership of a property. |
| Underwriting | Process of determining the risks involved in a particular home loan and establishing suitable terms and conditions for the home loan. |
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
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