Archive | June 2014

Origination also has many benefits for estate agents


In less than 20 years, home buyers have become so used to sourcing their finance through mortgage originators like BetterBond Home Loans, that this business channel now accounts for more than 60% of the new home loans granted every year.

However, says BetterBond CEO Shaun Rademeyer, the benefits of mortgage origination don’t stop at convenience for buyers but extend in several ways to estate agents.

“As a start, an originator like BetterBond is able to arrange home loan pre-approvals for prospective buyers so that they (and the agent showing them properties) can concentrate only on those homes they know they can afford. This increases the likelihood of a sale, and it also creates a level of comfort for the agent’s client, the property seller, when accepting an offer to purchase.”

Secondly, he says, originators can and do help agents overcome the biggest obstacle in the way of most residential sales – that is, the need for the buyer to obtain a home loan – by speeding up the loan application process and providing buyers with personalised advice on the choice of loan.

“Third, mortgage origination can significantly improve agent productivity. It frees the agent of the need to assist buyers with loan applications and time spent administering these. He or she can get on with the business of selling more properties.

“And finally, the transaction tracking and management performed by originators like BetterBond, usually translates into faster property transfers and quicker payments to agencies of their sales commissions. This can significantly improve agency cash flows.”

However, Rademeyer notes, agencies need to be sure that the origination partners they choose can actually deliver all these benefits. “And what they should be looking out for is an originator that employs experienced consultants who not only have extensive loan product knowledge, but are willing to establish each buyer’s financial situation and motivate their individual applications.

“It is, of course, also important to work with an originator that has embraced the latest technology not only to make loan applications, but also to track and manage them, and to keep their clients’ information private and secure.”


BetterBond helps new buyers to budget

Couple moving house

Advising first-time buyers about home financing is a serious business – and is taken seriously by the home loan consultants at BetterBond Home Loans, SA’s leading mortgage origination group.

“We realise,” says CEO Shaun Rademeyer, “that the information which many first-time buyers need goes well beyond what their home loan options might be. They often don’t know, for example, if they have budgeted properly for a home purchase and if they will be able to afford their home loan repayments every month”.

Others may need to know, he says, how much cash they will require to cover the ‘hidden’ costs of a home purchase such as transfer duty and bond registration costs, and yet others may not have allowed for the ongoing costs of home ownership such as municipal property rates, estate levies and maintenance. But the BetterBond loan consultants are trained to provide all this information and more, and that can really smooth the way to a successful home purchase.”

“The main reason we do this is that we want people’s homes to be the foundation of their future wealth, not a financial burden that swallows up too much of their income every month. It is also why we recommend that all buyers – and especially those entering the market for the first time, should be pre-qualified for a home loan before they start looking for their new home.”

Getting pre-qualified, Rademeyer notes, enables prospective buyers to focus their home search on those properties they know they can comfortably afford, instead of being tempted to “stretch” themselves financially to buy something too expensive. It also increases the likelihood of their offer to purchase being accepted, because the seller is reassured that they are financially capable of buying his property.

Meanwhile, he says, home buyers calculating the ongoing costs of home ownership should not forget about the premiums for at least two types of insurance that will probably be new to them, the first being homeowners insurance (HOC), which covers the “bricks and mortar” of the home itself at replacement value – that is, the amount it would cost to rebuild should it be completely destroyed, say by fire or flood.

“Most homeowners simply allow the premium for this insurance to be debited to their home loan account, but it is worth noting that paying it separately when it falls due could mean a long-term saving of thousands of rand in interest. In addition, a borrower does not have to buy this insurance from the bank that gives him a home loan, as long as he can prove that he has enough cover.”

And similarly, Rademeyer says, the lending bank may insist on the borrower having what is called “bond insurance” – which is actually credit life insurance to cover the outstanding amount of the bond in the event that the borrower dies or is permanently disabled – but the borrower is also free to obtain this insurance wherever he likes.

Five Tips for Getting Out of Debt

Debt can be the source of much stress and many a sleepless night, so it’s understandable that people want to eradicate theirs as soon as possible. No one enjoys this burden and, very often, people fall into despair and struggle to see a way out. There are, however, certain things that can be done to get on top of what you owe. Here are five helpful tips for getting out of debt fast.

List Your Debts

This may seem obvious, but it’s important that you know exactly what your debts are, how much you owe on each and what the individual interest rates are. Organisation is the first key in successfully getting on top of debt. Once you have a comprehensive list, you can then calculate how much money you have to go towards paying off what you owe. You’ll need to look at your income as well as your monthly expenses, which includes everything from groceries, electricity bills and your mortgage payments. This will reveal how much money is left over to tackle your debt with.

Prioritise Pay-Offs

When listing your debts, you’ll also want to prioritise them in order of size and importance. Working on settling your larger debts first is best, especially since they usually carry a higher interest rate. Debts with the most severe penalties should be seen to as soon as possible.

Maximise Your Income

Additional money from other sources besides your monthly salary is welcomed at the best of times; even more so when you owe creditors. Consider procuring an extra source of income, such as a job on the weekend, or freelance work. Every little bit helps and the more money you can generate that can go towards fixing your debt problems, the better. If you get a lump sum in the form of a tax return or a refund of some kind, put that towards minimising the debt as well.

Downsize and Cut Back

Even though it’s hard, get rid of anything unnecessary, such as that car that is expensive to maintain, as well as any other luxury items that you can live without. Reducing your debt is also about a change in attitude – you need to make a concerted effort to curb your spending and be more frugal with your money. Very often debt is caused by not being able to hold back and living above your means, so try where you can to spend less. It’s essentially about restraint.

Debt Management Plan

Lastly, a smart approach to dealing with debt is to speak to a professional who can assist you with drawing up a Debt Management Plan. Financial planners can be a great source of knowledge and help, but you can also go the route of debt counselling. You can learn a lot about managing your debts and finding reasonable solutions to your money problems.

Being in debt is an uncomfortable and worrisome position to be in, but there are ways to get yourself out of this predicament. Apply these tips to your situation and you’ll no doubt see an improvement in time.


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Buying Your First Home: Important Questions You Need to Ask Yourself

first time buyers

Life is made up of firsts: your first tooth, your first day of school, your first kiss and, eventually, your first home. Making the decision to purchase your first house is a big one and whilst it signals an exciting new chapter, it can also be rather terrifying. For first-time buyers, you’re entering unchartered territory, so it’s important that you fully understand all that comes with owning your own home. Ask yourself the following crucial questions to make sure you’re completely prepared for your maiden purchase and all that comes with it.

Can I really afford a new home?

Unless you’re one of very few people who can afford to pay for a new home with a once off payment, you’ll have to rely on a home loan. Paying off a bond is an ongoing financial commitment, so it’s important that you’re in a secure monetary position to support it. You’ll need to be employed and be earning sufficiently to cover the cost of monthly bond repayments along with all your other usual bills.

Have I considered the additional costs involved?

Buying your first home is not about paying a lump sum and simply moving in. There are additional costs you need to consider, such as transfer fees, registration, moving costs, rates and the deposit you’ll need to put down initially. People often forget that mortgage protection and home owner’s insurance are also required. You need to take these into account when deciding whether or not you can afford to buy a house.

What is the loan amount I can realistically apply for?

Having included all the variables, if you can now say with confidence that affording a new home is a possibility, then you’ll need to work out exactly how big a loan you can apply for. During the loan application process, numerous factors are taken into account when calculating the loan amount, such as your credit history, monthly household income as well as your current debts, liabilities and assets. BetterBond’s Mortgage Calculator can assist you in working out the loan amount for which you are eligible.

Have I pre-qualified for a loan?

You’ve done the research and worked through the numbers, and now you have a loan figure in mind. Before you can start looking for your dream home, you need to ensure that you have pre-qualifiedfor a loan. This is where BetterBond steps in. These experts in the field will navigate the entire home loan application process for you, saving you time, effort and of course, stress. Strong relationships with all the leading banks together with a deep understanding of what is required for a successful loan application means that your chance of not only getting a bond, but also one at the best possible interest rate, is high. The best part? You get all this experience and expertise free of charge.

What kind of home am I looking for, does it suit my budget and am I willing to live in it for several years?

Whilst you may dream of a five bedroomed mansion with a walk-in cupboard and swimming pool, your budget may not allow for such a home…right now. You need to look for a home within your means but also one that will meet your needs. For instance, if you plan on starting a family soon, it’s probably not in your best interest to buy a one bedroom flat. You need to consider your current and mid-term needs, as well as acknowledging that you’ll more than likely be living in this home for the next few years. Lastly, when searching for a home, remember to think about its location. Consider whether the area is safe or not, and whether it’s close to local amenities. Your needs should dictate the kind of house and area in which you choose to live.

So you’ve found your perfect first home and now you’re holding thumbs that your home loan is improved. With some luck it’ll take five short working days, and provided your offer is accepted, you can then really start dreaming about how you’re going to make that house your home.


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How to choose an estate agent when selling your home

If you are trying to sell your property, it is important that you make use of the services of an informed, professional estate agent to get the best out of your deal and ensure a hassle free process.

Here are the some important tips to keep in mind when selecting your estate agent:

  1. Choose a few potential estate agents based on feedback from friends and relatives, colleagues, websites, etc. While making a short list, focus on the agents’ experience. Find out some information on their background, what deals they’ve closed and how they would deal with your property sale if it was not selling as hoped.
  2. Interview all the short-listed estate agents, and gather information about their experience and credentials. Someone who has taken the time to qualify with related qualifications and has membership of professional organisations/bodies may help you negotiate a better deal and provide a better service.
  3. Are you and the agent compatible? You’ll be doing a lot of communicating with your agent and this compatibility will make the process a lot easier in the future.
  4. Choose an agent you can trust. Look for enthusiasm, dedication, creativity and market savvy. All of these will translate into extra efforts and you’ll definitely stand to benefit from that.
  5. Know the team. Estate agents will have employees who will be equally representing yourself and the property sale. They should also be skilled and able to converse and communicate intelligently about all the details involved in your property transaction. Make sure whoever you are dealing with respects you and your time.
  6. Make sure your estate agent understands exactly what you want, and that he/she is capable of achieving that. That said, also make sure your expectations are realistic. An estate agent who offers a figure lower than you had envisaged may be giving an honest appraisal and not just telling you what you want to hear.
  7. Choose an estate agent who has outstanding negotiation skills, personality, and charisma. A good estate agent will first look to satisfy your target price, not that of the buyer.
  8. Consider estate agents who are able to offer multiple advertising opportunities (including advertising on the internet) and in-house arrangement of property inspections.
  9. Remember: Higher fees do not always represent better service.
  10. Examine the contract closely and fully understand what you are committing to.

Good luck finding the right estate agent for you!

Originators have a better rate of success


Whether you’re buying your first home or your fifth one, you have a much better chance of being approved for a home loan if you apply through a mortgage originator than if you try to handle things alone.

“And the reason for that is simple,” says Shaun Rademeyer, CEO of BetterBond Home Loans, which accounts for more than 25% of all residential mortgages being registered in the Deeds Office and is SA’s leading bond origination group.

“We have a motivation and multiple application process that allows us to ‘rescue’ many of the applications that are initially rejected by one bank and get them approved by another lender – to the extent that we are now getting approval for at least seven out of every 10 applications we receive.”

“In the 12 months to end-March, for example, we were able to rescue almost 26 000 applications, worth almost R18 bn, that had initially been turned down – which was a 5% improvement on our rescue rate for the previous 12 months.

“In addition, some 7000 of the rescued applications, worth around R5, 3bn, were applications that had originally been declined by the clients’ own banks.”

Indeed, he says, although all the major banks have been more willing to lend to home buyers in general over the past 12 months, there has been an increase of almost 9% in the number of own-client applications that they have rejected. “It is thus much better for homebuyers to apply through an originator and have the option of immediately turning to other institutions if their own banks turn them down.

“Meanwhile, we would like to dispel a few lingering misconceptions about what mortgage originators do and how they operate. First of all, there is no charge at all to consumers for our service – and nor does the home buyer who obtains a loan through us get charged a higher rate of interest.

“In fact, our knowledge of bank requirements and processes is so extensive that most of our clients end up paying a lower rate of interest than if they had gone to a bank directly, and are able to make significant savings on the long-term cost of their homes as a result.”

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