While bond originating companies have been operating in other countries for a long time, they emerged in South Africa only about nine years ago. It is their purpose to find the home buyers home loans at lower interest rates and get them approved. South Africa now uses this service freely and people like it.
This service gained popularity quickly. For example, in 2007, approximately 60% of all new home loans in South Africa were secured through bond origination. Apparently consumer confidence in this service blossomed due to consumers placing their confidence in it. This is due to convenience and the ability of the mortgage originators being able to secure the lowest interest rates for home buyers.
Without using a bond originator, prospective home purchasers must go to banks in person to apply for loans. Of course, banks are open for regular business hours only. When you use a bond originator, they will conform to the hours when you find it convenient to meet with them. They will come to your residence. You are required to go through the loan application once rather than repeatedly at each bank.
They take the situation in hand for you and deal with all four major banks, small and private banks and other lenders. They collect offers to provide the loan for you from various lenders. You sit back and accept the one offering the best interest rates and related terms. The bond origination industry saves South African consumers approximately R 5bn in lowered interest rates. As you would expect, banks are not fans of loan originators.
In addition to getting the best interest rates, the time it takes to obtain a loan can be cut in half. Why deal directly with a bank considering all the advantages of the alternative? The NCA (National Credit Act) stopped the banks from requiring home buyers to insure with the more expensive insurance companies. The bond originating companies advise home buyers on insurance plans that are best for them.
It is hard to believe you gain all these advantages without paying a fee. The loan originator is paid a fee by the lender you select. You not only get the best deal, but you don’t have to pay a fee for it.
There are a myriad of advantages to be found when securing home loans through these service companies. With financing firmly in place, you can feel confident when you search for the property that is the one you want. You are ready to make an offer immediately. The estate agent will advise the sellers that you are prepared to finance immediately. This gives you a head start over those who are not ready. Now you can concentrate on finding the new home of your dreams.
Did you know that bond originators have the ability secure substantially interest rates for Home Loans in Southern Africa? Get the best inside skinny on exactly how they achieve this in our Home Loan Documentation guide.