An estimated 50% of all bonds in South Africa are now processed by originators, as more and more homebuyers find it the most effective way of applying for a home loan.
According to Shaun Rademeyer, CEO of BetterLife, South Africa’s largest mortgage originator currently accounts for 25% of all new home loan applications in the market and boasts a 70% success rate of bond applications submitted.
“Increased obstacles for the borrower, in terms of legislation such as the Financial Intelligence Centre Act and the varied and more stringent requirements, have made obtaining bond finance a complicated exercise,” Rademeyer explains. “However, with the knowledge and experience of a bond originator, prospective homebuyers can enjoy a ‘pain free’ experience and then obtain the necessary finance they require at the best rate possible.”
Amongst other things, bond originators know what an applicant needs to successfully obtain a home loan. “One of the advantages of dealing with an experienced bond originator is that we are able to structure the bond application so as to maximise its chances of success. We are also aware of all the banks’ products and how their criteria vary. We do a credit check to ensure that the home buyer receives the credit based on the pre-qualifying amount and what deposit is required. We then assist applicants to complete the necessary documentation and guide them through the process and, of course, negotiate the best interest rate on their behalf,” says Rademeyer.
“We submit the client’s bond application to multiple banks, including the client’s own bank, at the same time. This reinforces competitiveness as banks are aware that where an originator submits an application there are also other banks competing for that business. In other instances, a client submits the application to its own bank first and if declined, then submits to other banks. By this time the other banks are informed of the declined decision and take this into consideration when reviewing the application.”
Rademeyer adds that by using an originator home buyers’ receive multiple offers from different banks at the same time enabling them to make a more informed decision.
Perhaps most importantly, there is no fee attached to utilising a bond originator to secure a home loan. Banks remunerate bond originators, or whichever institution advances the loan. These costs are not passed to the client and the services are entirely free of charge.
For more information go to: www.betterlife.co.za