Mortgage Origination – What’s it all about?
Mortgage originators give you independent advice on choosing a home loan and help you obtain it without the hassle of doing all the legwork yourself – we answer some commonly asked questions.
Q: What is mortgage origination?
A: Basically it is the business of negotiating, on behalf of a prospective property owner, a home loan with a bank. Some originators, like Bond Choice offer other services that may help a buyer, like advice on estate agents in the area, how to complete the sale agreement, etc.
Q: Why do I need a mortgage originator?
A: Because your home purchase is probably the most expensive one you’ll make in your life, the home loan itself is an important financial decision and the benefit to be gained from making a correct choice can amount to savings of hundreds of thousands of rands over the life of the loan.
Q: Is choosing a home loan really that difficult?
A: All home loans differ from one another, and each bank may evaluate your worth differently, so it is not as simple as shopping around for what appears to be the best rate in the market. Each bank has varying credit policies that cater for different client circumstances. Bond Choice has knowledge of all the banks´ products and will advise you on the type of loan that best suits you. They will negotiate with the banks on your behalf to get the best rate for that product.
Q: I have heard that this service is free. How so?
A: Indeed, the service is free for the homebuyer. Bond Choice receives a fee from the bank for doing the groundwork on the loan and thereby reducing the banks costs. The bank is, by law, not allowed to add this cost to the amount of the loan, so you won’t pay more than if you approached the bank yourself.
Q: Isn’t it easier to just get my home loan from my regular bank?
A: Your bank will encourage you to keep all your finances under one roof, so to speak. But at what cost? Because Bond Choice originates loans for all major banks, this offers you, the buyer, choice and by being able to compare various products and rate offers, you get the best home loan deal in the end.
Q: How do I know if I’m getting good advice?
A: The professionalism of the originator will quickly become evident, so make sure you are dealing with someone who can explain their recommendation clearly and are credible. Check their track record and only deal with an originator that is a member of the National Association of Mortgage Originators (NAMO).
Q: Must I accept any of the packages they offer?
A: No, you have not entered into an agreement with the originator other than to give them the information they need to get quotations from the banks. You still make the final decision whether of not to accept their offer.
Q: Once I’ve accepted their recommendation what happens?
A: Bond Choice will submit your application together with the relevant documentation, such as copies of your ID and salary advice, to the bank agreed on advise you once your loan has been approved. A good originator should also keep you informed all the way through to registration and liaise with the conveyancing attorney on the loan’s progress.
Courtesy Bond Choice Home Loans