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Buying

Choosing a Property That Is Right For You

 

Affordability, availability and suitability. Whether this is your first tentative step on to the property ladder or you are an old hand looking for the perfect home for your retirement, achieve the right balance between these 3 principles will set you on your way to being a happy home owner.

Affordability

Your first port of call. Knowing what you can afford means less time wasted on looking at properties that could be out of your reach. Remember: there is no point buying the house of your dreams if it's going to turn into a financial nightmare. Be prepared! Better yet, get pre-qualified for a home loan.

Making use of Bond calculators can help you answer questions like:

What home loan amount do I qualify for?

What will my monthly repayments be?

What if I pay extra each month?

Availability

Now that you know what you can afford (remembering any costs for improving the property) it’s time to take to the streets and see what kinds of properties are available where. Make a list of your needs, that is, the features that your home must have to fit your lifestyle. Be as rational, rather than emotional, as possible when making this list. Your Harcourts agent can help hugely here by advising you on what is on the market and what to expect in what areas. It's likely that you will have to compromise on some of your likes and dislikes so be prepared to be flexible.

Location, location, location! You can improve the property but you can't move it. Remember however, to think to the future of the area, not just what its current state is. You estate agent may even be able to help you find out of there are any new development plans of possibilities in the area – are they attractive or not?

Suitability

You’ve found somewhere you like the look of and it's in your price range - do you go for it? Think laterally now - what does your future hold? If it's family, then can you expand the house? Are there schools close by? If it's retirement, are your family and friends nearby? Is there a hospital or clinic near-by? Ask the neighbors about crime in the area, noise levels, traffic congestion. Don't compromise on things that are important to you. If they annoy you now, they will only annoy you more later!

Lastly: Be patient and shop around. You may get lucky and fall in love with the first property you see, but you'll make a better decision if you look at a number of them instead.

WHY YOU SHOULD NOT APPLY FOR A HOME LOAN WITHOUT A BOND ORIGINATOR

 

Who wants to school themselves in ratios and amortisations and securitisations when there’s more appealing homework to tackle – like choosing fabric swatches and light fixtures? But before you can hit Builders to canvas the paint aisle you have to get the right financing for your new home. From independent advice to better interest rates (and better results), using a bond originator as your personal home-loan consultant comes with some major perks. “A bond originator is a very useful partner for the first-time homebuyer,” says ooba CEO Rhys Dyer, who explains that these bond experts will assess your financial situation as part of a ‘needs analysis’, and match your requirements to a wide range of loans from banks and other financial institutions; managing the process right through to settlement.

Here are five more good reasons to consider using a bond originator

  • A bond originator will search for a deal that meets your needs. This provides access to a large range of loan options without you having to do any of the legwork.
  • The consultant will have access to loan rates as well as fees and charges at his or her fingertips so it’s easier to make a straightforward ‘apples for apples’ comparison of loan costs.
  • Consultants also have good relationships with banks, and can often negotiate a very competitive rate. Banks receive a significant amount of business through bond originators so it’s in their best interest to work closely with them.
  • The consultant’s experience in the home-loan industry will help you make informed decisions and allow you to feel confident throughout the process.
  • The best news is that you won’t need to pay your bond originator: instead, they receive a commission from the bank on the loans they settle.

What to expect when you meet with your bond originator

Your first meeting will usually take around an hour, and in that time, a qualified consultant will:

Ask what you are looking for in a home loan and understand the particulars of your situation

Calculate how much you may be able to borrow and what your repayments will be so you’ll know what sort of range you can buy in

Help you choose the loan and associated features that meets your needs

Explain the application fees and other charges associated with the loan

Explain the home-buying process end-to-end including making an offer, getting legal advice, exchanging contracts and transfer

The consultant will walk you through the application for the loan of your choice – if and when you are ready. You’ll need to have some documentation and information handy; your consultant will tell you what you need to submit to the bank you’ve chosen.

You should feel informed and confident in the next steps in the process when you leave your first appointment. And the good news is that your consultant will be with you every step of the way making the process very clear and simple.

 

Guide to the Bond Registration Process for First Time Home Buyers

 

It takes at least three months for the registration and transfer of a bond. But knowing what to do and where to get help will make the process considerably quicker and easier.

 

ARTICLE SUMMARY

 

  • Together with signing the Offer to Purchase and paying the deposit, registering a bond is one of key stages involved in the process of buying a home.
  • In addition to the buyer, seller and estate agent, a number of attorneys may be involved in the bond registration process.
  • Depending on the type of sale, the period of transfer can vary from anything between 6 and 12 weeks or longer.
  •  

Here, our easy-to-understand guide takes you through the whole process of registering your bond and buying your home.

 

THE PARTIES

 

There are a number of people who will be involved in the bond registration process.

 

They are:

 

  •  The seller
  •  The estate agent
  •  The purchaser (you)
  •  The transferring attorney (appointed by the seller to transfer the property into the your name)
  •  The bond attorney (appointed by the bank granting the bond, to register the bond)
  •  The cancellation attorney (appointed by the bank with which the seller holds his or her bond, to cancel this existing bond)

 

Note that the same attorney could be appointed to handle more than one or even all of the above transactions.

 

THE TIME FRAMES

 

While the transfer process follows a series of successive stages, the time period involved varies considerably. Generally the following guidelines apply:

 

  • A cash transaction: approximately six weeks.
  • A sale that is contingent on the purchaser applying for and being granted a bond: approximately twelve weeks.

 

THE PROCESS

 

Stage 1: The purchase / sale of the property

Property is traditionally sold by way of a written Offer to Purchase, signed by both the purchaser and the seller, as well as their spouses if they are married in community of property. Witnesses need to sign the Offer to Purchase, too. A verbal contract for the sale or financing of fixed property is invalid, according to South African law.

The Offer to Purchase must be carefully examined to ensure that it accurately reflects the parties’ full agreement, especially with regards to the amount payable, the method of payment, all verbal promises made by the seller or his or her estate agent, the incorporation of all special conditions to suit the parties’ particular needs, the time of the buyer’s physical occupation of the property (which may coincide with registration), and the transfer of the property.

If physical occupation and transfer do not coincide, the Offer to Purchase must specifically provide for occupational rent payable between the dates of occupation and transfer. If the sale is subject to the buyer obtaining a bond, this must also be specified in the Offer to Purchase, as must the period within which bond approval must be obtained to avoid the deal being delayed indefinitely.

Stage one is finalised when the agreement / Offer to Purchase is signed by both purchaser and seller. It should be noted that estate agents are not always party to the sale and therefore not obliged to attend the registration process.

Estate agents have their own Offer to Purchase, but an attorney can also draft one specifically suited to the needs of the parties concerned.

 

Stage 2: The payment of the deposit

The purchaser makes an initial payment (deposit) and receives a copy of the Offer to Purchase for his or her records, as does the seller. Simultaneously, the transferring attorney is furnished with the original deed or agreement of sale, making it possible to draw up the necessary documents. Finally, a copy is kept on file by the estate agency concerned.

Stage 3: The registering and approval of the bond

The purchaser applies for a bond with a bank – a bond originator will take care of this, cost free, on behalf of the purchaser. Once a bond has been granted by the bank, it advises the bond attorney to register the bond.

Fumigators may be instructed to inspect the property for infestation by beetles (it has become common practice for this condition to be added to the Offer to Purchase in coastal areas). Also, if the seller is not in possession of an electrical compliance certificate, plumbing compliance certificate or electrical fence compliance certificate, these will need to be obtained.

 

Factors that could delay the registration of a bond:

 

  • Failure by the seller and/or buyer to provide personal information.
  • Failure by the seller to provide details of the bank holding the existing bond.
  • Seller or buyer’s tax affairs not being up to date.
  • Seller or buyer not complying with all clauses on the Offer to Purchase.
  • Buyer not meeting all the special conditions of bond approval.
  • The existing bondholder delaying/not providing cancellation figures and title deeds to the transferring attorney.
  • A delay in receiving rates figures (local authority) and/or clearance certificate (transferring attorney).
  • Failure by the buyer to pay a deposit (if required).
  • A delay in the provision of guarantees.
  • Failure by the buyer to pay the bond and transfer costs on time.
  • A delay by the seller in signing the transfer documents.
  • A delay by the buyer in obtaining government capital subsidy approval/employee subsidy documents for new bondholders and failure to comply with other requirements of the bank.
  • A delay by the buyer in signing the transfer and/or bond documents.
  • When the bond attorney, transferring attorney and cancellation attorney are three separate firms.

 

To make the home-buying process that much easier, South Africa’s leading home loan comparison service offers a range of home loan calculators, including those that determine bond affordability and bond repayments.

 

Get pre-qualified, or apply for a home loan with ooba home loans today.

How to get a 100% home loan – zero deposit!

While there are many benefits to putting down a deposit on your home, in today’s tough economic climate it may be more realistic to take out a 100% bond, especially if you’re a first-time buyer who does not have easy access to a deposit.

Indeed, if you fall into this category of homebuyer, you’re not alone. “More than half of all the applications received by ooba are from buyers who have no access to a deposit,” says Kay Geldenhuys, Head of Sales Fulfilment at South Africa’s largest bond originator ooba.

100% home loans in South Africa

According to Geldenhuys, close to 80% of these applicants are being approved for finance and three out of four are successful in their bid to secure a 100% bond. The rest are required to raise a deposit, and that is generally one that is between five and 10 percent of the purchase price.

“Contrary to the widely held belief that the chances of getting 100% financing are slim, these stats prove that, when correctly represented, buyers have a very good chance of obtaining a bond without a deposit,” she says.

However, Geldenhuys emphasises the importance of using a reputable bond originator. “Banks are willing to approve 100% bonds if they can see that you have a clean credit history and can comfortably afford the monthly repayment instalments. An experienced bond originator will ensure you are correctly represented to the financing institutions so that they view your application in a favourable light.

“It’s essential that these candidates evaluate their financial situation before applying for a bond,” she adds, noting that there are, equally, many advantages to putting down a deposit.

“By providing capital upfront in the home-buying process, you will avoid paying interest on that amount of money for the duration of your loan period, which can amount to a significant saving in the long term,” she explains.

“If, for instance, you purchase a R1 million property with no deposit at a 10% interest rate, you will pay approximately R9 650 per month over 20 years. At the end of the term of the home loan, you will have paid back around R2 316 052. On the other hand, with a R100 000 deposit, the monthly repayments will be approximately R8 685, and the total repayment will be around R2 084 447. Add the deposit to this and the total comes to R2 184 447 – making the total repayments some R131 605 cheaper than buying without a deposit.

“It also stands to reason that the smaller the risk for the bank, the more negotiable it will be on your interest rate,” she adds.

To gauge the affordability of your property price, and the likely chances of obtaining bond approval, it’s advisable to prequalify with a bond originator, a free service that ooba provides prior to the start of the home-buying process.

“Once you have an indication of the deposit required, you’ll be better positioned to consider the best approach needed to obtain your financing,” Geldenhuys says.

South Africa’s leading bond originator offers a range of home loan calculators to help people looking to buy a home determine what they can afford. Click here to access ooba’s free, online prequalification tool, the ooba Bond Indicator. Then, when you’re ready, you can get prequalified or apply for a home loan with ooba.

Just A Thought ..............

 

 

AS SOON AS YOU BEGIN TO PERSUE A DREAM.

LIFE WAKES UP, AND EVERYTHING HAS MEANING

Why Should YOU Get Prequalified?

A prequalification certificate establishes your credit rating and gives you an accurate indication of how much you can afford.

I Have Been Prequalified, Will The Bank Guarantee This Money?

While not an absolute guarantee, 85% of all home loan applications with a prequalification certificate are approved.

What Does A Credit Check Include?

A thorough analysis of your credit history, including your credit score which is determined by the frequency of payments of your retail accounts.

Why ooba?

ooba is more likely to secure you a bond than your bank

Home loans are our only business, that’s why we are regarded as the best in the industry at getting bonds approved.

  • We will help you complete one application form which can be submitted to all banks
  • We will apply to multiple banks including your own with only one application.
  • We will provide you with multiple quotes to compare.
  • We will negotiate rate & terms where necessary.
  • We will help you secure a zero deposit bond if required.

How to Qualify for a Home Loan in South Africa

Pre-qualifying for a bond clears the path to your effortlessly making an offer on your dream home. 

How to get pre-qualified for a home loan

Step 1: You’ll need to provide your ooba consultant with a summary of your monthly income and expenditure, including income tax and living expenses. You’ll also need to state any debts you may have.

Step 2: Your ooba home finance expert will formulate your pre-qualification amount in accordance with the guidelines of the National Credit Act. You will then be issued a pre-qualification certificate, which you can give to an estate agent to prove you’re bond approved and ready to roll.

Step 3: Your pre-qualification is valid for 90 days. After this, your ooba home finance expert will contact you to check whether your expenses have changed during this period of time. If there has been a material change, the pre-qualification will be recalculated and revalidated. If there is no change to either income or expenditure, ooba will reissue a revalidated certificate.

Step 4: Once the bank has assessed your home loan application and given it the thumbs up it will issue a quotation. This will include an interest rate, the cost of the credit, and any special conditions that may apply. Your ooba home finance expert will take you through the entire process, explaining everything you need to know.

Step 5: When you agree on a quotation, ooba will notify the relevant bank, which, in turn, will proceed to instruct the pointed attorney to register your bond. You’re now good to go!

Alternatively, use ooba’s convenient Bond Indicator Tool to assess your pre-qualification amount and obtain your ooba Bond Indicator Certificate.

The ooba Bond Indicator (OBI) is an online, self-service, 100% secure and paperless application, where within five easy steps and no more than a few minutes, you’ll have an idea of your credit profile, as well as a summary of your affordability and a realistic indication of your price ceiling.

How To Get A Home Load As A First Time Buyer (Without a Deposit)

 

 

Longing to own your own home but can’t afford a deposit? These are the criteria banks apply when looking at applicants for a no-deposit bond.

  • Banks typically apply very strict criteria when looking at home-loan applicants who have no deposit as they are considered substantially riskier.
  • The usual requirements for zero-deposit borrowers may include a clean credit rating, a strong repayment history, stable employment and a standard type and location of prospective property.
  • Guarantor loans are ideal for borrowers who have a consistent borrowing capacity and income, but lack the means to gather the initial deposit

For many people, buying a home is part of the great South African dream. Yet with the high cost of living, saving for a deposit can be extremely difficult.

Indeed, if you fall into this category of homebuyer, you’re not alone. “Nearly half of all the applications received by ooba are from buyers who have no access to a deposit,” says Kay Geldenhuys, Property Finance Processing Manager at South Africa’s largest bond originator.

“Contrary to popular belief, it’s not impossible to get 100% financing. In fact, a significant 74% – or three out of four – of our applicants are successful in securing a no-deposit bond, while the rest are required to raise a relatively small deposit, generally only one that is between five and 10% of the purchase price.”