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.”