Itâ€™s critical that you understand the ins and outs of home loans and prepare for the costs involved, since for most people a home loan is their biggest investment and also their biggest debt.
Getting your Home Loan
The number of SA Home Loan providers are increasing which means itâ€™s becoming easier to find mortgage finance for your home.
But, before youâ€™re granted a home loan, every bank will have to consider your credit record and your ability to repay the bond. The value of your property is so a vital consideration.
In previous years Banks were reluctant to grant 100% homeloans – loans that do not require a deposit. Recently though, the competition among the banks has meant that banks are now willing to offer you a home loan as much as 108% of the value of the property.
The extra 8% is used to cover any costs involved in registering the bond.
The interest charged on your home loan will always remain a vital consideration. Unlike most loans you are offered, the interest rate charged on your home loan can be negotiated and a difference of 1% or 2% can mean a saving of over R25 000 over the term of the loan.
Banks will usually offer you the base or prime rate or slight lower.
Always try to motivate your home loan consultant to get the best possible interest rate.
Where to apply for a home loan
FNB, ABSA, Nedbank and Standard bank are the four major SA home loan providers, but these are definitely not your only options.
Mortgage Originators have special relationships which most of the banks and by applying for a home loan though a mortgage originator such you can be assured that your application will be sent to each of these banks.
The Bond Originator does not grant you the bond, rather they assist you in getting finance for your home. The application process is much fast since you only have to deal with one company and you have the luxury of choosing the bank that best suits you.