Homeloan - interest rate

Y'all Qaeda

Y'all Qaeda

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So I am waiting for the banks to approve my homeloan application. I applied for house plus transfers etc.. But total amount is still about 2/3rds from what I am "approved" by the banks - according to their own affordability calculators- both me and my fiance have degrees.

What type of interest rate can I expect? Will they approve with transfers?
Anyone have any insider info on this?
 
Is this your first home?

You're probably going to be looking at prime, or prime +1.. anything in that range will be decent.

Also, are you looking at a 100% bond?... you might battle your get loan + transfer in your homeloan since there is no equity in the house to cover the transfer fees you're trying to finance.
 
GhostSixFour said:
Yes. First time home buyers, and yes, 100% bond required..
Click to expand...

Then I'm pretty sure your home + transfer fees will get you declined or at least a pretty high interest rate...

Your better option is to go for a 100% bond, and then short term loan on the transfer fees.

Also, don't believe those calculators.. one of them told me a bank would give me enough money for a R2m home... when in reality a bank wouldn't give me any more than R1m.
 
You don't mention a deposit.

I got given a 9% interest rate as a first time homebuyer. I did pay a 10% deposit and all the transfer fees and duties though.

Seems the banks will give you different offers. Standard bank offered me 9% and FNB offered me 12%.
 
czc said:
You don't mention a deposit.

I got given a 9% interest rate as a first time homebuyer. I did pay a 10% deposit and all the transfer fees and duties though.

Seems the banks will give you different offers. Standard bank offered me 9% and FNB offered me 12%.
Click to expand...

Hmm, 9.45 with a 35% deposit, they seem to like you more.
 
GhostSixFour said:
So I am waiting for the banks to approve my homeloan application. I applied for house plus transfers etc.. But total amount is still about 2/3rds from what I am "approved" by the banks - according to their own affordability calculators- both me and my fiance have degrees.

What type of interest rate can I expect? Will they approve with transfers?
Anyone have any insider info on this?
Click to expand...

The risk model which determines your interest rate is comprised of various inputs, some which you can change and some which you cannot.
Some of the ones which you can 'change' are:
Credit record (via the credit bureaus)
Loan size vs property value
Income vs expenses (or affordability)

Some of the ones which you cannot change are:
Age
Location and type of property

The model won't always make sense. For example, a smaller loan amount (e.g. R500k) will usually attract a higher interest rate than a larger loan amount (e.g. R1.5m) even though technically it is a smaller risk.

With respect to transfers - if your property is worth more than the loan amount and transfers then they may approve. If you are getting 100% bond, then don't count on it.
 
The interest rates on homeloans these days is ridiculous.
4 years ago when I bought my place we got Prime - 1.75 and I thought that was relatively high.
The Prime rate did come down a fair bit since we bought, so our bond repayment got lower and lower...

But I would no way buy a property right now. Friend of mine is the IDEAL person to give a homeloan to, and she got Prime. Madness. I wouldn't accept anything higher than Prime - 1.5 if I were to take out a loan now.
 
AniV said:
The interest rates on homeloans these days is ridiculous.
4 years ago when I bought my place we got Prime - 1.75 and I thought that was relatively high.
The Prime rate did come down a fair bit since we bought, so our bond repayment got lower and lower...

But I would no way buy a property right now. Friend of mine is the IDEAL person to give a homeloan to, and she got Prime. Madness. I wouldn't accept anything higher than Prime - 1.5 if I were to take out a loan now.
Click to expand...

Then you wouldn't be buying a house
 
I just bought a place that costs a fraction of my income because I want it paid in 5 years and I had a 10% deposit and I am covering transfer fees myself. I still got prime plus .55%.

My previous place was bought on a 108% bond and I got prime less 1.5%.

The banks are clearly pricing in greater profitability per loan to counter act lower volumes. Can't really blame them though, they got burnt with tons of bad debt thanks to reckless pre NCA lending.

Those who believe the property boom times are coming back any time soon are kidding themselves. It's going to be low slow growth for a long time as the rules of the game have changed.

At least the boom / bust nature of the industry is now gone.
 
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Why not save up for the deposit and transfer fees? I got prime minus 0.75 as a first time buyer by only financing 90% of the house price.
 
The interest rate I was offered was the same whether I borrowed 100% or 90%.
 
AniV said:
My point exactly.
Bank wants my business, they need to match my current rate or nearby.
Click to expand...

Then they don't want your business. If memory serves me correctly, even the big Private Banks are not giving their clients anything better than Prime - 1%.. and these are ppl who are NOT high risk ppl...
 
I have recently jsut bought a first house(still waitign to transfer into my name) I had a 20% deposit and could afford all the fees and i was given prime - 0.5% also rememebr you can always renegotiate yoru interest rate at later stages i have heard from a few people they have brought their interets down by 1% by going in every few months and renegotiating !
 
This is probably the best place to raise this:

I am amazed at the difference in the way banks approach home loans. Through a bond originator, we applied to 4 different banks for a home loan and each one had a different answer!!! Shocking!!!

Nedbank said that since we own our own business, they cannot help us with a homeloan UNLESS we have a cheque account with them, which we do not.

ABSA granted our loan at 8.26%, but it took them THREE WEEKS just to get a valuator out to see the property.

FNB turned our application down because according to them our income does not justify a loan of the size that we wanted. How come ABSA thinks otherwise??

Standard Bank has UP TO NOW not had the decency to respond to the application. How very mediocre!!
 
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