Home Loan Basics

Your home loan is one of the biggest finance responsibilities you’ll ever have so it’s important to make use you’re getting the BEST BOND deal. You’re about to find out everything you need to know about South African Home Loan Finance in just A Few Seconds.

Home Loans – The Break Down

  • How a Home Loan Works
  • How to Secure Mortgage Finance
  • The best Types of Home Loans
  • Who will get you the Best Bond Deal

1. How a home loans works – The basics of home loans
When you borrow money from a bank to pay for to purchase a property, the bank pays the full selling price directly to the Seller and you are then liable to repay this sum, including interest, back to the home loan provider.

After you loan application is approved you’ll sign an agreement with the bank/mortgage provider, stating the terms and conditions of the loan.

The total outstanding loan amount is repaid over a maximum of 30 years and interest is charged on the outstanding amount. Because you’re paying off the bond over 30 years you monthly repayments are relatively small compared to those of vehicle finance and personal loans.

Interest charged on Home Loans is often far less that credit card or personal loan interest.

2. How to Secure Mortgage Finance

  • How much do you qualify for?
  • Credit Check
  • Property Value Assessment
  • Approval

How Much do I qualify for
The first step to securing Mortgage Finance is to find out from a Home Loans Consultant what you can qualify for based on the combined monthly salary of you and your spouse. Banks will usually offer you a Bond with a repayment amount that is up to 30% of the joint monthly income.

Credit Check
Once you’ve submitted your application to the bank with all the supporting documentation a credit check is done. A negative credit history could mean you’ll have to settle for a lower bond amount.

Property Value Assessment
If the bank believes that you are able to afford the Bond amount they will instruct a property valuer to assess the current market value of the property.

You’re Bond is Approved
If the property valuation is favourable your bond will be approved. The interest rate on your bond is based on the Size of the Mortgage and the current market value of the property.

3.The Best Types Of Home Loans
One key factors one should consider when applying for a home loan is whether you will need to access the funds available in your home loan, if you need more then a 100% loan, and the rate and term you’re willing to accept.

Interest Rate Options:

    Variable Interest
    Fixed Interest
    Capped Interest
    Reducing Interest

Home Loan Products:

    First-Time Bonds
    Access Bonds
    Interest Only Bonds
    Equity Release Bonds

4.Who will get you the Best Bond Deal

Mortgages, Interest Rates, Terms and Valuations – this is only some of the jargon you’re bombarded with when it comes to applying for an SA Mortgage.

With all this confusion how can you be sure you’re getting the best SA Mortgage Deal? Here’s the quick Answer, use your Mortgage Originator.

A Mortgage Originator will do all the legwork for you. The experienced Home Loan consultants will submit your application to all the banks and secure the best possible Mortgage rates.

Benefits of using a Bond Originator:

  • Experienced Home Loan Consultants – with knowledge of all the products available at every bank.
  • A Free Service. Bond Originators are paid by the Bank and this cost is not transferred to the client at all.
  • Faster Bond Approvals – You don’t need to go and visit the bank or fight with them to get your approval since your Bond Originator already knows how to fast track your application.

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