Home Loan : First Time Buyer

[bromster]

Hi all,

I have put in an offer to purchase on a property in Cape Town for R1.4m. I have spare cash, but will still ask for 100% bond.

Is there anybody who has done this recently who might know what Interest Rate I might expect as a first time buyer, and which banks stand the best chance of getting 100% bond.

Is 100% at prime a little bit too ambitious?

Much obliged.

 

[Pakka]

It depends greatly on your job type, income level, expenses, credit score and the property's value compared to other properties in the area.

I haven't tried for a 100% recently.

If your monthly repayments will be less than 30% of your income, you'll definitely get a loan with at least one of the banks. The rate is any one's guess.

My advice is to use an originator. We've had the best experiences with FNB and ABSA.

Hope you get sorted soon

 

[SpoonTech]

Hi all,

I have put in an offer to purchase on a property in Cape Town for R1.4m. I have spare cash, but will still ask for 100% bond.

Is there anybody who has done this recently who might know what Interest Rate I might expect as a first time buyer, and which banks stand the best chance of getting 100% bond.

Is 100% at prime a little bit too ambitious?

Much obliged.

Why would you want a 100% bond?
This almost always does not make much financial sense at all.

At 9.5%, you'll be paying R185 567 more over 20% years with no deposit, as opposed to a 150k deposit.

 

[bromster]

Why would you want a 100% bond?
This almost always does not make much financial sense at all.

At 9.5%, you'll be paying R185 567 more over 20% years with no deposit, as opposed to a 150k deposit.

I need the cash for renovations. Once that is done, I will pay the remainder into the bond and plan to settle in 10 years.

 

[calypso]

I asked for 100% bond, then used that as a benchmark to see how much people would drop rates if I then decided to put in a deposit.
10% deposit reduced my rate by 0.5%.

 

[heartbroken]

Why would you want a 100% bond?
This almost always does not make much financial sense at all.

At 9.5%, you'll be paying R185 567 more over 20% years with no deposit, as opposed to a 150k deposit.

Whaaaat? No are you crazy? ALWAYS try for a 100% bond. Giving cash up for a deposit means it gets tied up in the property and you loose access to it until the day you sell.

1. Get 100% bond
2. Drop 'deposit' cash into flexi reserve (conservative but instant access to your funds and the same savings as your example) or buy into an EFT with a return greater than your interest rate. (for the savvy investor)
3.?????
4. Profit

(The only downfall is your debt exposure on a 100% bond is slightly higher than say on a 90% bond, which will impact you affordability for additional home loans while this one is not paid off, but putting the money into the flexi reserve eliminates that, so meh)

I need the cash for renovations. Once that is done, I will pay the remainder into the bond and plan to settle in 10 years.

Good man Simmons, good man.

 

[FuLL_MeT4L]

Last time I checked, 100% bonds were only available for bonds up to R1 mil. I stand to be corrected though.

 

[biometrics]

Use a bond originator like ooba for the banks and contact SA Homeloans directly.

 

[bromster]

Thanks for the replies. I have been told that some originators penalise you for trying to increase your bond payment and shorten the term, but I don't understand how that is legal.

And just as a reference, my colleague just got 2 options today from nedbank:

100% of 1.75m @prime+0.75
Or
90% of 1.75m @prime

 

[Kosmik]

Last time I checked, 100% bonds were only available for bonds up to R1 mil. I stand to be corrected though.

Corrected. Had 100% bond approved for 1.15m

 

[Kosmik]

Use a bond originator like ooba for the banks and contact SA Homeloans directly.

Depends on your relationship. Shop around but my cheapest rate and best offer came from my bank.

 

[mike6870]

Enjoy the new pozzie, bru !

 

[modern10]

Subscribes

 

[calypso]

One can still get up to 1.5m 100% loan

 

[ToxicBunny]

Thanks for the replies. I have been told that some originators penalise you for trying to increase your bond payment and shorten the term, but I don't understand how that is legal.

And just as a reference, my colleague just got 2 options today from nedbank:

100% of 1.75m @prime+0.75
Or
90% of 1.75m @prime

Originators have nothing to do with the loan once you've signed it..

 

[Velenoso]

All depends on the relationship with your bank. 100% is perfectly possible.

 

[Mimen]

Contact a bond originator. They got me a lower interest rate than I could find on my own. Ask them for advice on which is ghe best decision, 100 % bond or not. Even ask for a financial adviser at your own bank.

 

[Salt]

Recently I dealt with an originator and directly. Got the same deal from both so I don't think going through an originator guarantees a better rate. If I could do it again now I would have left the originator out. We got 100% at prime plus .5% Deal directly if you can and bargain as much as you can. Share the rates you get with the bank you prefer and ask them to beat it - do it a few times if you have to. Also, dictate which lawyers YOU want to use - don't let the banks bully you. If the lawyer is on their panel you are within your rights to insist they are used - and NEGOTIATE with the lawyers - push them for the max discount. They are all out to make money - your money and then do a little as possible. Check the lawyers on the 'petties and postage' fees especially after you've asked for 25% discount for both sides of the deal. All the best and enjoy!

 

[bromster]

Recently I dealt with an originator and directly. Got the same deal from both so I don't think going through an originator guarantees a better rate. If I could do it again now I would have left the originator out. We got 100% at prime plus .5% Deal directly if you can and bargain as much as you can. Share the rates you get with the bank you prefer and ask them to beat it - do it a few times if you have to. Also, dictate which lawyers YOU want to use - don't let the banks bully you. If the lawyer is on their panel you are within your rights to insist they are used - and NEGOTIATE with the lawyers - push them for the max discount. They are all out to make money - your money and then do a little as possible. Check the lawyers on the 'petties and postage' fees especially after you've asked for 25% discount for both sides of the deal. All the best and enjoy!

Thanks. I hadn't considered getting my own lawyers for a preferential rate. Any recommendations for CT Southern Sub's are welcome by PM if anyone has had good experiences.

 

[maumau]

Don't fall for "approved in principle" on your bond. Wait for "approved".

A colleague stands to lose thousands after "approved in principle" was followed some weeks later by "denied".

He's already put money into alterations.