First Time Home Buyers Missing Out On Best Bond Deals

People taking first time home loans in South Africa are often unaware of the choices open to them. They are also not aware that help and advice can be obtained without charge. As a result they accept bond arrangements that will cost them many thousands of Rands extra in the long-term, simply for lack of shopping around, or through not negotiating.

A relatively new development in the bond market that many first time home buyers are not aware of is that 108% bonds are available. Banks have recognised that many people entering the housing market for the first time are not capable of raising the large amounts of money necessary to cover the extra upfront costs - especially with the rise in property prices attracting ever-increasing fees. These include transfer duties, start-up costs, conveyance fees, and bond registration costs. Some banks require that these costs need to be paid back within the first five years, while others spread the repayment over the lifespan of the bond.

Not only this, but those looking for first time home loans in South Africa are no longer required to pay a deposit - again because banks have realised that these large deposits have had the effect of deterring young people from buying houses. With these conditions, it is now easier to enter the property market at an earlier age, which gives people the best chance of seeing return on their investments as soon as possible.

First time home buyers do not have to do the bond negotiating by themselves. There are bond originators, like Mortgage SA, who will do the negotiating on their behalf, and will secure much more favourable interest rates, usually better than the prime lending rate. This is of course dependent on individual cases, and each one is assessed on its merits. If you can afford a 20% deposit, you can obtain an interest rate as low as 1.7% below prime, using agencies like Mortgage SA.

All of this makes it an excellent time to take advantage of the current climate, wherein banks are displaying willingness to enable young people to take their first steps on the property ladder.

First Time Home Buyers Missing Out On Best Bond Deals with MortgageSA

3/7/2008 4:04:49 PM