Q: How do I decide what loan amount to apply for?
A:
Depending on your circumstances, you can choose to play it safe by applying for a bond below your maximum affordability, with a sizeable deposit, or take advantage of the current lending climate to secure a loan of up to 105% of your purchase price. It’s not a one-size-fits-all situation but your bond originator can help you find the right balance for your finances and lifestyle.
– Leonard Kondowe, Rawson Finance
Q: I had planned to buy a home this year but am worried about the economic climate. I also do not want to miss out on good opportunities in the current market. How long will the buyers’ market last?
A:
We foresee an extended buyers’ market kicking in in the next six months and we expect it to last at least 18 to 24 months. While the interest rate cuts are favourable in the short term, buyers need to plan and budget for an expected increase in the medium to long term. It is vital that buyers take their affordability levels into consideration and budget for future interest rate hikes.
– Grant Smee, Only Realty
Q: I have been granted a home loan with my bank but have been told that I could get a better rate through another. Is it wise to apply for a bond at more than one institution? A
: Many people think that just because they have banked with one institution for a number of years, they will automatically get a better interest rate there than from any other institution. However, this is not the case and buyers should bear in mind that shopping for a mortgage is like shopping for a car – it pays to compare offers. One of the best ways to do so is to utilise the services of a bond originator to source the best financing option. They don’t charge for the service and their access to multiple lenders enables them to negotiate on your behalf and to obtain the best deal, potentially saving you thousands of rand in interest over the term of the bond.
– Claude McKirby, Lew Geffen Sotheby’s International Realty