Even the most optimistic and resilient of us have to accept that the state of the economy is worrying. For the average person, we see the result of this on a daily basis when we fill up with petrol, buy groceries, pay our utilities bills and so much more. In particular, we feel the impact on the price we pay to borrow money to pay off various loans. The South African Reserve Bank faces a dilemma to keep a lid on inflation without further impacting on our already struggling economic growth. To tackle this problem, they have increased the prime lending rate by 475 basis points since November 2021, exceeding pre-pandemic levels. It is also likely to increase in the future.
So what does this mean when it comes to your Home Loan? Well the simple answer is that you’ll be paying considerably more per month to service your debt. For this reason, it is exceptionally important when purchasing a home to do your homework and shop around for the best mortgage/home loan deals. To do this however you’re going to need help from an experienced professional, and this comes in the form of the right Bond Originator who can process your application, advise on the best approach and then negotiate on your behalf to secure the best interest rate and terms.
When considering their financing options, I have often heard clients and friends say that they are sorted and have a long-standing relationship with their bank, only to realise that perhaps they weren’t as important or valuable as they first thought they were when the offer comes in.
Banks are competing for bond business and are often looking beyond just home loans to see if they can get more of your business too. A bond originator can approach as many as 8 or 9 retail banks on your behalf, at no cost to you, and present your case. More often than not, they obtain a better interest rate or deal for you. The value of this over a 20-year loan term and on a monthly basis can be considerable.
Local Real estate has forged excellent relationships with key originators over the years and we specifically point our clients in the right direction depending on their needs,
So make sure you consider all your options when making this important loan decision in the purchasing journey.