Applied for a bond....

yebocan

yebocan

Honorary Master
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Now North..behind the BW Curtain...
Facts: 1st Time buyer
: Property Cost, R790k
: Used the supplied bond originator, that only applied to FNB
: Got 100% bond approved at prime +1.85%
Question: am I being raped here?
....awaiting the usual MyBB assistance:p
 
I think most people are aiming at prime these days and getting that plus or minus a tiny bit. So seems a touch high?

How much deposit?
 
yebocan said:
Facts: 1st Time buyer
: Property Cost, R790k
: Used the supplied bond originator, that only applied to FNB
: Got 100% bond approved at prime +1.85%
Question: am I being raped here?
....awaiting the usual MyBB assistance:p
Click to expand...

Not bad for first time buyer ,try and get it to to prime + 1% :P
 
Shop around and play them off of each other.

My friend bought a house 3 months ago and applied to SB and FNB, SB wouldn't budge on the rate but FNB dropped it by almost a full percent just to get the account away from SB.
 
yebocan said:
Facts: 1st Time buyer
: Property Cost, R790k
: Used the supplied bond originator, that only applied to FNB
: Got 100% bond approved at prime +1.85%
Question: am I being raped here?
....awaiting the usual MyBB assistance:p
Click to expand...

also try to add at least a 20% deposit to final amount, that will keep high rates down...
 
The bond originator should submit you to all the banks regardless of what they think they know. If they only applied to FNB then they more than likely have an agreement with them and are getting kickbacks at your expense. Tell them you want to see the paperwork from all banks with offers. In my experience ABSA is generally the cheapest, FNB and SB are usually not willing to budge on their first offer and nedbank is just an all round useless bank for people that like to throw their money into black holes.
 
russellO said:
Shop around and play them off of each other.

My friend bought a house 3 months ago and applied to SB and FNB, SB wouldn't budge on the rate but FNB dropped it by almost a full percent just to get the account away from SB.
Click to expand...
So a bond is like any other product, the offering is flexible to get the business?

They'll have a target interest rate they'll want clients to take the product at considering all their particular circumstances but if the competition can beat them the bank person can use their discretion to discount the rate they can offer you to get your business?

And I suppose if your creditworthiness is up the creek then you won't have many banks wanting to offer you an attractive bond rate and the amount you can negotiate the rate down by becomes negligible if at all?
 
airborne said:
So a bond is like any other product, the offering is flexible to get the business?

They'll have a target interest rate they'll want clients to take the product at considering all their particular circumstances but if the competition can beat them the bank person can use their discretion to discount the rate they can offer you to get your business?

And I suppose if your creditworthiness is up the creek then you won't have many banks wanting to offer you an attractive bond rate and the amount you can negotiate the rate down by becomes negligible if at all?
Click to expand...

Somewhat correct yes. Your credit score, deposit % and affordability (income vs expenditure) determines the interest rate mostly. The fact that most people can't afford to buy a place cash and need a bond, especially with so much of the country being **** poor, means the banks have an endless stream of bond applications and hence their unwillingness to budge on their extortionist rates. They do have leeway to adjust the interest but they usually don't care if you take a bond with them or not. I haven't heard of many people playing one bank offer off another successfully - they generally tell you to go with the other bank or they will offer you the exact same rate as the other bank making it pointless.
 
Waaib said:
Shop around for sure!
Click to expand...

+1 Take some time and submit your application to the other banks also. Nedbank and ABSA both have online application portals so no effort. Not sure about SB though, because I hate them.

^^vampire^^ said:
.....they usually don't care if you take a bond with them or not. I haven't heard of many people playing one bank offer off another successfully - they generally tell you to go with the other bank or they will offer you the exact same rate as the other bank making it pointless.
Click to expand...

Managed it twice now. The first time the bank matched the interest offer of the other bank, but waived the initiation fee, scoring me R5700. Second one, ABSA gave 0.3% less than the competing offer and almost 1.5% less than their initial offering. 0.3% isn't much, but calculate the compound interest on a 1.5bar loan over 20 years on that :wtf:

TL;DR: Shop around
 
^^vampire^^ said:
The bond originator should submit you to all the banks regardless of what they think they know. If they only applied to FNB then they more than likely have an agreement with them and are getting kickbacks at your expense. Tell them you want to see the paperwork from all banks with offers. In my experience ABSA is generally the cheapest, FNB and SB are usually not willing to budge on their first offer and nedbank is just an all round useless bank for people that like to throw their money into black holes.
Click to expand...

Not quite. Nedbank gave me the best deal by far on both my houses.

You should apply at your own bank as well. If the bond originator does the application, only they can negotiate a better deal. They are not bothered because they get a kickback, and the higher your rate the more they get (I would imagine). If you apply personally you can negotiate with the bank yourself and try to get a better rate.

The criteria they use to issue bonds also change every few months (or the values at least), so it depends on each bank's current circumstances and how much debt they already finance. Thus if you don't get a good rate try another bank.
 
I would stay away from bond originators.
I got much better rates by going directly to the different banks.
 
yebocan said:
Facts: 1st Time buyer
: Property Cost, R790k
: Used the supplied bond originator, that only applied to FNB
: Got 100% bond approved at prime +1.85%
Question: am I being raped here?
....awaiting the usual MyBB assistance:p
Click to expand...

We're all being RAPED by the banks, whether it be car Finance, Bond, Credit Card, or simply bank charges.

But Prime plus 1.85%?? Dude, they're RAPING you with A fire hydrant!


Viper25 said:
I would stay away from bond originators.
I got much better rates by going directly to the different banks.
Click to expand...

Absolutely.
 
furpile said:
Not quite. Nedbank gave me the best deal by far on both my houses.

You should apply at your own bank as well. If the bond originator does the application, only they can negotiate a better deal. They are not bothered because they get a kickback, and the higher your rate the more they get (I would imagine). If you apply personally you can negotiate with the bank yourself and try to get a better rate.

The criteria they use to issue bonds also change every few months (or the values at least), so it depends on each bank's current circumstances and how much debt they already finance. Thus if you don't get a good rate try another bank.
Click to expand...

I was told the area/townhouse you want to buy also has an influence. If the bank already has too many bonds in that complex, chances are they will give you a higher rate so that you go elsewhere... Something about risk something-something
 
^^vampire^^ said:
The bond originator should submit you to all the banks regardless of what they think they know. If they only applied to FNB then they more than likely have an agreement with them and are getting kickbacks at your expense. Tell them you want to see the paperwork from all banks with offers. In my experience ABSA is generally the cheapest, FNB and SB are usually not willing to budge on their first offer and nedbank is just an all round useless bank for people that like to throw their money into black holes.
Click to expand...

Definitely agree here. I've been through this before and caught her out in a lie.
 
^^vampire^^ said:
Somewhat correct yes. Your credit score, deposit % and affordability (income vs expenditure) determines the interest rate mostly. The fact that most people can't afford to buy a place cash and need a bond, especially with so much of the country being **** poor, means the banks have an endless stream of bond applications and hence their unwillingness to budge on their extortionist rates. They do have leeway to adjust the interest but they usually don't care if you take a bond with them or not. I haven't heard of many people playing one bank offer off another successfully - they generally tell you to go with the other bank or they will offer you the exact same rate as the other bank making it pointless.
Click to expand...

Haven't heard? Well here it is...it happens all the time.
 
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