An estimated 50% of all bonds in South Africa are now processed by originators, as more and more homebuyers fast discover this is the simplest, least expensive and most effective way of applying for a home loan.
This is according to Shaun Rademeyer, CEO of BetterLife, SA’s largest mortgage originator currently accounting for 25% of all new home loan applications in the market and boasting 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,” says Rademeyer, “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.”
As specialists in the home loan industry, bond originators such as BetterLife will assist from the outset with an overall assessment of your financial situation, creditworthiness, and affordability.
“We do a credit check to ensure that, as a home buyer, you’ll receive the credit you wish to apply for and advise you, based on the pre-qualifying amount, what deposit you require,” explains Rademeyer. “We then assist you in completing the necessary documentation, guide you through the process and, of course, negotiate the best interest rate on your behalf.”
“We submit the client’s bond application to multiple banks, including the client’s own bank, at the same time,” he explains. “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,” he says, “a client submits the application to their own bank first, and upon decline then submits to other banks. By this time the other banks are informed of the decline and take this into consideration when reviewing the application,” he maintains.
“Using an originator also allows the home buyer to receive multiple offers from different banks at the same time enabling them to make a more informed decision,” he says.
“Perhaps most importantly,”explains Rademeyer,“is that there is no fee attached to utilisiing a bond originator to secure your home loan for you. Banks remunerate bond originators, or whichever institution advances the loan. These costs are not passed on to the client and our services are entirely free of charge.”
The benefits of using a bond originator are clear and there’s no arguing the fact that they are taking the pain out of raising bond finance. With specialised knowledge and multiple lending sources, originators such as BetterLife Home Loans are valuable resources.
“They know what the banks are looking for and supply the correct information in the correct manner, removing issues of time and red tape,” says Rademeyer.
Other advantages of using a bond originator include:
– All the necessary paperwork is managed for you. You simply need to submit your proof of earnings and bank statements to the originator. They will then setup your application to ensure the process is a smooth one.
– You won’t need to figure out the different jargons included in your bond agreement because your bond originator will be there to explain it to you.
– Applications to multiple banks can be made instantaneously, saving you time and the inconvenience of doing it all yourself.
– The bond originator has relationships with multiple institutions, which means that you, as the consumer, have a greater choice.
– The originator on your behalf, saving you time and money, conducts follow-ups with banks.
– As the customer, you always have the choice. After reviewing the final bond grants from the banks, you decide which one you want to use.
– Because originators have strong relationships with all the major banks they are often able to negotiate a lower rate on your bond – which could save you thousands over the term of the home loan.
– You won’t need to try and figure out all the jargon in your home loan agreement, as your bond originator will explain it to you.
What’s more, says Rademeyer is that commitment and good service are assured because bond originators only receive payment from the banks for approved applications and ultimately happy clients.