Getting pre-qualified and approved at Mortgage Plus

Before you put in an Offer to Purchase, this is the very first thing you should do – get yourself pre-qualified for a bond.

Getting yourself pre-qualified before putting in an Offer to Purchase should be the first step you take. The National Credit Act stipulates that monthly deductions, e.g. income tax, monthly living expenses and debt need to be taken into account. Your level of debt can affect the amount for which you qualify. It is advisable that you provide your Mortgage Plus home finance expert with an accurate summary of your monthly expenditure so your pre-qualification amount can be determined. Your Mortgage Plus home finance expert will formulate your pre-qualification amount and issue you with a certificate. This enables you to provide an estate agent with a pre-qualification certificate that has been calculated according to the National Credit Act requirements.


Your pre-qualification is valid for 90 days. After 90 days your Mortgage Plus home finance expert will contact you to check whether your expenses have changed over this period. If there has been a material change, the pre- qualification will be recalculated and revalidated. If there is no material change to either income or expenditure, Mortgage Plus will reissue a revalidated certificate.

Quotation

Once the banks have assessed your home loan application, and if the application is successful, the bank will issue a Quotation which will include interest rate, cost of credit, any special conditions that may apply, etc. Your Mortgage Plus home finance expert will discuss this and other bank quotations with you. Once you agree on a Quotation, Mortgage Plus will notify the relevant bank, who in turn will proceed to instruct the attorney appointed to register the mortgage bond.

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

The National Credit Act is still the chief factor limiting residential property sales, but matters are improving, say the experts.

The recent half-percent drop in the interest rates, though welcome, is not as significant a boost to the residential market as might be expected, says Lanice Steward, MD of Anne Porter Knight Frank.

“We have to take into account the rises in rates, electricity costs and fuel prices all of which together will nullify the 0.5 percent reduction.

“At the same time, we can be grateful for it, because in a sense it keeps home buyers on roughly the same budget as they had previously, despite these other increased costs.”

The chief limiting factor to growth in the residential property sector, says Steward, is still the National Credit Act and the stringent criteria it has caused the banks to impose.

Nevertheless, says Steward, even here there is some good news.

“The latest stats shows that the size of bonds in February 2010 was 13.9 percent up on those of February 2009.

“This has come about partly because property has slightly increased in value (the average South African home sold at R807 042 in February 2009 but the latest figure is R895 031), but also because the banks are now more willing than previously to accept smaller deposits.”

She says there has been a marked increase (29 percent) in the number of 100 percent bonds issued. In August 2009 only 18 percent of applications for 100 percent bonds were approved but the figure is now 32 percent. Also, 100 percent bonds now form 47 percent of the total money loaned, which is a very high proportion.

“The gradual easing up on the National Credit Act criteria, especially for those needing 100 percent bonds, is having an effect on the whole property market.

“But we are still in a tough borrowing phase – before introduction of the NCA only 8 percent of bond applicants failed to fulfil the bank’s credit criteria.

“Now the figure is 14 percent,” says Steward.