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- November
Eliminating bond originators not in the public's interest, says APKF MD | Anne Porter
Posted: 30th November -0001
Although two of South Africa’s largest banks appear now to be determined to eliminate bond originators from the mortgage bond application process, the residential property marketing sector remains convinced that they play an important role and it is definitely not in the public’s interest to operate without bond originators.
This was said recently by Lanice Steward, MD of Anne Porter Knight Frank, the Cape Peninsula estate agency.
Those bond applicants who are aiming for a 100% bond, said Steward, may be obliged to go direct to their banks because bond originators have recently been unable to secure bonds at this level.
However, for the remainder of bond applicants it has now been proved time and again, said Steward, that working with a bond originator usually produces a faster, neater and more competitive solution.
“The originator’s big advantage,” she said, “is that he is not tied to any one bank. A buyer is not obliged to get a bond from the bank with which he usually works. He is, therefore, in a position to get several quotes and varying terms and conditions. This can make a very big difference.”
Giving an example, Steward said that a 0,5% difference on an R800,000 bond (say between the standard rate of 9,0% and an 8,5% rate) over 20 years would amount to over R150,000. Furthermore, as is almost inevitable, if interest rates rise in the next two or three years, the 0,5% saving on the going rate, whatever level it reaches, could amount to anything from R300,000 to R450,000.
Quite apart from the savings achievable, said Steward, bond originators greatly reduce the time that the applicant spends looking for his loan. Dealing with an originator means he has only to fill in one set of details, whereas going direct to the banks will probably involve literally days of applying and, she said, the chances are that the inexperienced applicant working alone will make mistakes or leave out information, which will cause the application to be sent back to him, again lengthening the application time.
In Anne Porter Knight Frank’s experience many applicants who did originally apply directly to banks for loans found themselves later having to operate through bond originators who very often proved successful in getting a loan when the original application had failed.
For further information contact Lanice Steward on 021 671 9120 or email lanice@anneporter.co.za.
This was said recently by Lanice Steward, MD of Anne Porter Knight Frank, the Cape Peninsula estate agency.
Those bond applicants who are aiming for a 100% bond, said Steward, may be obliged to go direct to their banks because bond originators have recently been unable to secure bonds at this level.
However, for the remainder of bond applicants it has now been proved time and again, said Steward, that working with a bond originator usually produces a faster, neater and more competitive solution.
“The originator’s big advantage,” she said, “is that he is not tied to any one bank. A buyer is not obliged to get a bond from the bank with which he usually works. He is, therefore, in a position to get several quotes and varying terms and conditions. This can make a very big difference.”
Giving an example, Steward said that a 0,5% difference on an R800,000 bond (say between the standard rate of 9,0% and an 8,5% rate) over 20 years would amount to over R150,000. Furthermore, as is almost inevitable, if interest rates rise in the next two or three years, the 0,5% saving on the going rate, whatever level it reaches, could amount to anything from R300,000 to R450,000.
Quite apart from the savings achievable, said Steward, bond originators greatly reduce the time that the applicant spends looking for his loan. Dealing with an originator means he has only to fill in one set of details, whereas going direct to the banks will probably involve literally days of applying and, she said, the chances are that the inexperienced applicant working alone will make mistakes or leave out information, which will cause the application to be sent back to him, again lengthening the application time.
In Anne Porter Knight Frank’s experience many applicants who did originally apply directly to banks for loans found themselves later having to operate through bond originators who very often proved successful in getting a loan when the original application had failed.
For further information contact Lanice Steward on 021 671 9120 or email lanice@anneporter.co.za.
Posted by: Anne Porter Knight Frank
