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Our Mortgage Experts Specialises in First Time Home Buyer Loans, New Home Loans, Building Loans, Further Home Loans, Bond Switches and Mortgages throughout South Africa. Click Here to go to The Mortgage Plus Website.
We offer a wide range of advice on different home loan options - 0861 11 11 93*
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Home Loan Terminology
After operating in the home loan industry in South Africa for a number of years, Mortgage Plus has been able to build up the experience and thus the expertise necessary for giving the best assistance to those looking to take out a Home loan or Mortgage on a property in South Africa
We consequently become a specialist in the field of home loans with more and more people in South Africa coming to us for our expertly reliable home loan assistance services.
Before you apply for a loan, it might be best to get in contact with Morne Prinsloo the General Manager at Mortgage Plus Bond Originators that will explain the home loan and real estate terminology to you the consumer in addition to this he can also negotiate the terms of the home 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.
Home Loan and Real EstateTerminology in South Africa:
| 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. |
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
The word “home loan” or “mortgage” have exactly the same meaning. Since most of us do not have enough money to pay cash for a home, we need to apply for a home loan or mortgage from a bank to assist us with the purchase
If you found the home of your dreams and the bank grants you a home loan then your bank will pay the owner of that property. Thereafter you will have to start to making monthly repayments to pay off the debt you now have
Although the definition of a home loan is straightforward, the actual process is very detailed in nature. Here are some basics about home loans that you should know.
Home loan amortization
Amortization is a term used to describe the payment of a homeloan through a schedule of systematic payments. You will have to keep up with your monthly payments to the bank until your home loan is paid in full.
Your monthly payments are made up of principle (the original loan amount) and interest payments. A loan amortization schedule shows the allocation of each loan payment to interest and principle
Loan Term
Your loan term is the amount of time it takes you to pay off your loan. The loan term can vary from 5-30 years, although most people in South Africa, prefer a 20 year loan term.
The longer you take to pay off your loan the lower your monthly repayments will be, but at the same time the interest that you will be paying will be much higher.
Types of Mortgages
The most common ones in South Africa are the fixed, variable rate mortgage as well as, more recently, the interest only mortgage.
A fixed rate mortgage means that your repayments remain the same over a certain period. The only increase that you can expect is the result of increases in insurance rates and property taxes.
With a variable rate mortgage your monthly repayments will fluctuate. If interest rates are going down your monthly repayments will decrease, but should rates go up your payment will increase accordingly.
With an interest only mortgage you only pay off the interest on your loan and delay the repayment of the principle debt. However, you will have to settle the debt eventually by either restructuring your payments or by selling your home.
Financial Calculators
If you are comparing either a fixed, variable or interest only mortgage home loan, then you could use one of our financial calculators to help you decide.
You should now have a much better understanding of what a home loan or alternatively a mortgage is.
For a more detailed discussion on various subjects you can call us on (011)327-4489 or go to www.mortgagepluscc.co.za
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