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IT’S LOCATION, LOCATION, LOCATION BUYERS embarking on the househunting process should understand the maximum loan amount they qualify for, says Shaun Rademeyer, chief executive of MultiNET Home Loans. They then need to establish where their budgets allow
them to buy. “Our advice is to find areas with higher-valued properties and then find a property in that area that needs some TLC and fits in the budget. This will give a home buyer the best return on their investment in the long run after some
improvements have been made.” Alternatively, if home improvement is not a buyer’s game, Rademeyer advises that they research the areas properly with a qualified estate agent and be sure to make a suitable offer based on their affordability levels.
The majority of home loans registered by the banks come through bond originators. PICTURE: KINDEL MEDIA/PEXELS
Originators can give a leg up the ladder
A buyer should look to purchase in an area that has higher-valued properties that fit into their budget. PICTURE: NIKOLA KNEZEVIC/UNSPLASH
Understanding the process
BOND originators entered the South African mortgage industry in 1999 and, by 2001, after only two years, originators accounted for approximately 40% of total mortgages granted, says Mandy Waddington, head of marketing at ooba Group. “Currently, about 60% of all buyers are using a home loans comparison service, such
as ooba, to secure finance for their property transaction.” Shaun Rademeyer, chief executive of MultiNET Home Loans says about 50% of the bond business in South Africa is procured through originators. “It has been stable over the past few years with the banks’ share of the market being concentrated in the private
banking space and origination focused on first-time buyers.” Kevin Mountjoy, director of Bond Gallery, adds: “Mortgage origination is a mature industry, having been established more than 20 years ago, and has evolved over the years to the extent that mortgage origination accounts for over 60% of all loans registered by the banks.”
Y O U R B A N K K N O W S E V E RY T H I N G
Buyers need to fully understand the criteria that banks consider when assessing their home loan applications. PICTURE: TUMISU/PIXABAY
ASPIRING homeowners often do not understand what is required of them to ensure a successful home loan application – or what the banks actually base their decisions on, according to Kevin Mountjoy, director of Bond Gallery. They might not understand that the most important criteria that the banks look at in assessing a client’s loan application are what they can afford and their credit rating.
“It is important for potential buyers to understand their purchase price parameters based on their affordability.” Getting prequalified is an essential part of the buying process as it helps buyers understand their buying potential, based on affordability. “Understanding their external credit profile/credit score is also a huge factor in the bank’s approval of a mortgage loan.”
It is possible that a buyer’s own bank could know too much about them to grant a them a bond. PICTURE: EXPECT BEST/PEXELS
MANY home loan applicants believe that it is more convenient to approach their own banks for home loans,
own bank could also know “too much” about them. “For example, a bounced debit order could impact your
approval. But this is also not necessarily the case. “All banks are governed by the National Credit Act,
as the institutions already have their information and
internal credit rating with your bank,” she says.
and have a responsible lending policy, so they
documentation. But Kay Geldenhuys, head
Many buyers also believe that their own bank will
cannot show favour to their customer over others.
of sales fulfilment at ooba Group, says this can often work against a buyer as their
show them some degree of preferential treatment and improve their changes of
“Everyone is evaluated for a home loan in exactly the same way.”
