Bond originators - your experience and advice needed

[Imagine...]

I'm wondering if it would be worthwhile to go to a bond originator for a home loan and see what they can get to offer to me, and whether the interest rate will be better than that offered by my bank. I have gotten a pledge from my bank for a home loan, but they have not indicated what the interest rate will be, saying that it will be indicated on taking out the bond.

Have you used bond originators in the past? Have they managed to get a better deal?
If they do give me a better deal, I assume I can then use that quote to negotiate a better rate with my bank.

Any recommendations for bond originators in Cape Town?

 

[SoWhat]

Why on earth will you go to the bank for a bond on your house? In the past in South Africa you had no choice but today we are not in the past anymore. While a bank will indeed offer you a bond to buy a house (and many people still go to some bank for a home loan), you'll endup paying thru your nose. A bank is ment to help you with your daily/weekly/monthly monetary transactions and not a bond measured in decades! To go to a bank and ask for a home loan is like washing your car . . . with a toothbrush It can be done but geee - have you asked for a quote from SAhomeloans or similar institutions?

 

[Billy]

I used OOBA (http://www.ooba.co.za/) when I needed a bond.

I got a great rate and they kept me informed of progress all along.

I also concur with the SA Homeloans advice. both my kids have bonds trough them.

 

[Deep78]

used ooba here in ct as well, but went to the banks ourself for homeloan as well ...
SA homeloan top offer was 90%,
absa - 80% no transfer cost
std ban - 85% no transfer cost
fnb - 100% with transfer cost
used ooba they matched some and got worse with others,
going to the banks or sa homeloans and the like urself might be a bit more work
but def worth the effort

 

[Wyzak]

Be very careful of mortgage originators. I used them in the past when they use to give you a slice of the pie that they receive from the bank. They have since stopped doing that and even though I have still occasionally asked them for quotes they have been considerably worse than the banks directly. You can fill in all the documentation online for all of the banks and you do not need to put a foot inside their door until you have accepted the quote and need to sign the final papers. I can also highly recommend SAhomeloans for efficiency. The banks did make several mistakes and threw away papers which I handed in.

Don't expect the bond originator to follow up with the banks like you would yourself.
One of my colleagues was also unable to get a quotation himself for a property he wanted to buy because the mortgage originator had already received a quote and the bank would not give more than one quote per property.

 

[Ekstasis]

I agree with the replies here. You must remember as well that bond originators can negotiate better with the banks than you can. Also do not ignore SA Homeloans - they've got a good reputation and are more lenient.

 

[Rocket-Boy]

I got a better rate going through one of the originators 3 years ago, but be prepared to be spammed by calls and emails for the next year after that.
I know they sold my details to marketers based on the number of calls that suddenly started.

 

[TheMightyQuin]

Why on earth will you go to the bank for a bond on your house? In the past in South Africa you had no choice but today we are not in the past anymore. While a bank will indeed offer you a bond to buy a house (and many people still go to some bank for a home loan), you'll endup paying thru your nose. A bank is ment to help you with your daily/weekly/monthly monetary transactions and not a bond measured in decades! To go to a bank and ask for a home loan is like washing your car . . . with a toothbrush It can be done but geee - have you asked for a quote from SAhomeloans or similar institutions?

Sheeze what an uninformed post!! I bought a house a year ago. Went directly to Standard Bank. First time buyer with NO assets. Got a 100% bond and they paid 50% of the bond registration fee and the lawyers footed the other 50% themselves. It was a special deal SCMB was offering at that stage. Took 8 working days. Bond originators are old school...the bank rather gives the originator's cut to the client nowadays. My business has quite a few conveyancy lawyers as clients and they are all of the same opinion.

 

[BobsLawnService]

Bond originators tend to punt the institution that offers them the best kickback and not always the one that offers you the best rate and they will lie straight to your face about what rates the banks have offered. Also, if there are any issues with the process the bank and the bond originators will blame each other and nothing will get done.

In my experience anyway. If you have a good relationship with your bank go deal directly with them. You'll probably get a better rate.

 

[ice_cubes]

Bond originators tend to punt the institution that offers them the best kickback and not always the one that offers you the best rate and they will lie straight to your face about what rates the banks have offered. Also, if there are any issues with the process the bank and the bond originators will blame each other and nothing will get done.

In my experience anyway. If you have a good relationship with your bank go deal directly with them. You'll probably get a better rate.

+1

 

[marco79]

I applied for a homeloan earlier this year through one of the bigger bond originators. I got declines from all 4 major banks due to affordability (they didn't want to take my allowances into account). I tried SA homeloan directly and got 90% approval. The valuator had a lower value for the house and the owner's didn't want to drop their price, so we left it. We followed the same process after finding a cheaper house and was declined by the banks (according to the bond originator). SA homeloans offered 90% and we accepted.

I later found our that FNB (my current bank), Nedbank and ABSA haven't even received any of the 2 applications (which the morgage originator apparently got declines on).

Go to the banks directly. The morgage originator lets you fill in a generic application form then they fax it to a few banks and wait for someone to get back to them.

 

[Nerfherder]

Just been through the process and it was very stressful.

Banks are not giving 100% loans on bonds over 1.5 mil, if they do then they give an insane interest rate (prime + 2.4% etc).

We use a Bond originator and we were very disappointed with the loan offers. When we approached our own banks they said that they prefer not to deal with the originators and want to rather deal direct with the customers. They claimed to be able to give better deals direct to the customers. This was from both Standard and Nedbank... both cases we realised that this was not true at all and just a ploy by the banks own originators to steal business.

Each bank did one thing to piss us off. Standard phoned the lawyers and tried to get them to process the loan without me accepting, Nedbank gave us the worst offer even though my wife banks with them and she is the main earner.... AND we had a 100% bond with them before at a much lower rate. We chose FNB because it was the best deal... now they want us to open an account.... well perhaps I will.

I really think that the most convenient way to get a bond is to do it though an originator, they are sharks but they will do all the admin and fight for you. Pity the banks are being such Nazi at the moment.

To come out on top you need to haggle with everyone, the agents, the originators, the sellers/buyers the lawyers and the banks.... or else you will end up getting screwed out of a LOT of money. Its tough times in the industry and very little business going round, you need to take advantage of this.

My advice: Use the originator to apply to other banks and then deal directly with your own. You need to see what all the banks have to offer and compare.

 

[a88277]

I worked for one of the big banks for 20 years. I note all the comments above and as it will allways be, everyone is in it for the money. The bank quote higher than whenyou go to the bond originators. To also keep in mind they might give u a good rate, espesially if you not banking with them, as they know if they bond you they got you, they talk about "Ring fencing" Never trust your own bank. Always apply at all of them, but use the originator that will go the extra mile. The people use the old bank staff that was worked out of the sytem but they was the people that made the efforts, they will do the same when working as Bond originators. SA Home loans, why do they not use the bond originators? Good Q! Do they really give back to the customer!:wtf: We are all here for the money.

 

[Rocket-Boy]

I worked for one of the big banks for 20 years. I note all the comments above and as it will allways be, everyone is in it for the money. The bank quote higher than whenyou go to the bond originators. To also keep in mind they might give u a good rate, espesially if you not banking with them, as they know if they bond you they got you, they talk about "Ring fencing" Never trust your own bank. Always apply at all of them, but use the originator that will go the extra mile. The people use the old bank staff that was worked out of the sytem but they was the people that made the efforts, they will do the same when working as Bond originators. SA Home loans, why do they not use the bond originators? Good Q! Do they really give back to the customer!:wtf: We are all here for the money.

I dont understand what you are saying, you mention that bond originators get quoted higher but then also mention that they will go the extra mile?!?

Im not phased about how difficult the process is, Im only interested in what interest rate I will get at the end of it.
Im going to contact my bank(FNB) and see what the offer, Im also going to check with bond originators to see how it compares.

 

[Schizoid29]

I recently went through the experience of buying a home and applying for a bond and thought I'd write up something on my experiences for posterity while it is still relatively fresh. I applied to Absa directly since they're already my main service provider and Ooba since I don't have enough of a form filling fetish to do the other banks myself. This was for a second bond, since I'm not selling the first place just yet.

Absa
I was able to handle the entire application online. Never had to set foot inside a branch. They somehow detected that the ooba application was a duplicate and canceled it. They offered me a 90% bond at prime interest, which to I decided to accept in the end since I already had a 10% deposit available. Apparently they have a policy about not offering 100% bonds on second home loans.

FNB
Second most competitive offer - 100% bond at prime + 0.25% iirc (this was after some negotiating, their first offer was prime+1). Didn't require statements from me - they were able to request it themselves. After some thought, I elected not to use them mostly due to the interest rate.

STD bank
Last bank to respond after several prompts. They're apparently unable to request statements from my bank on my behalf and this was the ONLY reason I ever had to enter a branch during the entire process. They literally gave me the ****tiest offer after taking their sweet time to send a agent to do the property valuation. 90% bond at prime+1.2 which they didn't want to negotiate. Then they phoned the lawyers to proceed with the loan despite not having my go-ahead. Will never use them. Ever.

Nedbank
Apparently these guys can't be bothered to give you a quote on a homeloan unless you're already banking with them. Meh.

Ooba
The agent that was handling my applications was very professional and responsive to email communications. I enjoyed working with her. They will also offer you life cover on the bond that ended up being slightly better priced than the absa offer. Unfortunately, they then canceled the life cover policy since I sourced the bond directly with absa and informed me of this cancellation through snail mail. This caused some needless delays.

Dykes & van Heerden
Conveyancing attorneys appointed by Absa. These guys had a tendency to wait until I prompt them for a status update before they would inform me of something that may be holding up the process. Disappointed, but not sure if there's anything to be done about it, since absa chose them.

 

[hj2k_x]

I recently went through the experience of buying a home and applying for a bond and thought I'd write up something on my experiences for posterity while it is still relatively fresh. I applied to Absa directly since they're already my main service provider and Ooba since I don't have enough of a form filling fetish to do the other banks myself. This was for a second bond, since I'm not selling the first place just yet.

Absa
I was able to handle the entire application online. Never had to set foot inside a branch. They somehow detected that the ooba application was a duplicate and canceled it. They offered me a 90% bond at prime interest, which to I decided to accept in the end since I already had a 10% deposit available. Apparently they have a policy about not offering 100% bonds on second home loans.

FNB
Second most competitive offer - 100% bond at prime + 0.25% iirc (this was after some negotiating, their first offer was prime+1). Didn't require statements from me - they were able to request it themselves. After some thought, I elected not to use them mostly due to the interest rate.

STD bank
Last bank to respond after several prompts. They're apparently unable to request statements from my bank on my behalf and this was the ONLY reason I ever had to enter a branch during the entire process. They literally gave me the ****tiest offer after taking their sweet time to send a agent to do the property valuation. 90% bond at prime+1.2 which they didn't want to negotiate. Then they phoned the lawyers to proceed with the loan despite not having my go-ahead. Will never use them. Ever.

Nedbank
Apparently these guys can't be bothered to give you a quote on a homeloan unless you're already banking with them. Meh.

Ooba
The agent that was handling my applications was very professional and responsive to email communications. I enjoyed working with her. They will also offer you life cover on the bond that ended up being slightly better priced than the absa offer. Unfortunately, they then canceled the life cover policy since I sourced the bond directly with absa and informed me of this cancellation through snail mail. This caused some needless delays.

Dykes & van Heerden
Conveyancing attorneys appointed by Absa. These guys had a tendency to wait until I prompt them for a status update before they would inform me of something that may be holding up the process. Disappointed, but not sure if there's anything to be done about it, since absa chose them.

Thread necro for relevance.

Did OOBA tell you which banks they approached?

Is it worth going to the banks directly rather than using a bond originator would you say?

 

[PotatoGuardian]

I've read lots of other experiences here and I can say that everyone is different and it probably depends on your circumstances. Here is my account:

I've been banking with FNB since 9 y/o now 28 y/o

I needed a homeloan of R920 000. I had no deposit (because first time moving out of my parents house I needed my savings for setup costs, attorneys fees, furniture, minor repairs etc). With no deposit SA Homeloans was not an option since as far as I know they don't do 100% loans.

Through my apartment hunting over the months one agent suggested using a lady at Betterbond. Since there was limited time to act with my property (due to the demand in Southern Suburbs Cape Town being high) I figured dealing with a bond originator might be the best option.

Standard Bank outright declined me.
Absa made an offer on R552 000 (random offer)
FNB offered R900000 prime + 1.3%

I knew that the other 2 banks were contacted by the originator because the agent told me they came to evaluate. (Not the same agent that originally recommended betterbond).

The originator could have lied about the offers but at the time I thought "eh... I don't want to move from FNB anyway"

People might say that I'm an idiot for taking prime + 1.3% but honestly I think it was likely because I didn't have a deposit and first time buyer and even though my credit rating is awesome I don't hold much debt.

 

[heartbroken]

STD bankThen they phoned the lawyers to proceed with the loan despite not having my go-ahead. Will never use them. Ever.

Still doing this more than a year later. Happened to me last month. I think they are trying to trick less savvy consumers into going ahead with the bond at STD.

STD bankWill never use them. Ever.

+1 NOT.EVEN.ONCE

 

[Kosmik]

Recent experience, going direct was cheaper and less hassle. Ooba flopped for me this round.

 

[Schizoid29]

Did OOBA tell you which banks they approached?

Yup. They approached Nedbank, FNB, Std Bank and ABSA on my behalf. ABSA cancelled the OOBA application since I had my own independent application at the time.

Is it worth going to the banks directly rather than using a bond originator would you say?

How much do you like filling in forms? Does it make you all wet and excited? I filled in forms for ABSA and OOBA and thought that was quite enough. Otherwise I would have had to do it 4x times.

I suspect you're likely going to get the same offers either way and the originator can negotiate better deals on your behalf on the basis of your financial situation/credit score/better offer from another bank etc. In the original post I mentioned that the FNB offer dropped from prime+1 to prime+0.25 - this happened after I told the originator of the better ABSA offer.