Should i get a home loan on prime plus?

[poorestguy]

Hi guys, after looong year of waiting I finally got a homeloan approved! Now rememebr that I am post NCA and recession so am just grateful for a loan.Now they catch is they offering prime plus 0.6!WTF? Is this worth taking? and I only have a 5% deposit. Any advice? Can I renegotiate the interest rate later?

 

[Nerfherder]

For a first time loan that is good.

Try get the rate fixed.

 

[syntax]

For a first time loan that is good.

Try get the rate fixed.

Fixed will almost certainly be a few % higher, and from what i understand, banks wont fix it for long periods anyways

 

[SinghDude]

Hi guys, after looong year of waiting I finally got a homeloan approved! Now rememebr that I am post NCA and recession so am just grateful for a loan.Now they catch is they offering prime plus 0.6!WTF? Is this worth taking? and I only have a 5% deposit. Any advice? Can I renegotiate the interest rate later?

Scout around. What rates are the other banks offering ?

 

[poorestguy]

apparently ABSA will only give 70% of loan value if you are not their customer so forget that. Only options left is Nedbank and Std Bank. Think they need 10% deposit..slightly outa my reach. Is there a way if renegotiating interest rates at a later year?

 

[Wasp_21]

Prime at the moment is 9%. So 9.6 will be very good. Fixed rate is guarenteed higher, by some 2-3%. If the interest rate hikes, you can then freeze / fix your rate for a period of time. The longer the period, the higher the extra %.

 

[supersunbird]

Is there a way if renegotiating interest rates at a later year?

Nope, and actually I consider you lucky for getting that interest rate from the banks. Have you tried SA Homeloans? I'm on less than prime and thats what I got DURING the crisis.

 

[Park@82]

apparently ABSA will only give 70% of loan value if you are not their customer so forget that...

Do they do 100% loans for customers?

 

[poorestguy]

there must be someway of getting better interest rate. i actually DO have a squeaky clean credit record for 4 years, come on!would it have helped if I had a bigger deposit?I did some research and saw that if you're not buying for over 1 mil then ur interest rates are gonna suck.sigh the poor have no chance

 

[syntax]

apparently ABSA will only give 70% of loan value if you are not their customer so forget that. Only options left is Nedbank and Std Bank. Think they need 10% deposit..slightly outa my reach. Is there a way if renegotiating interest rates at a later year?

I got 90% from them, I bank with Standard...

 

[Dolby]

Do they do 100% loans for customers?

I'm about to try

Will let you know in 2 or 3 working days

 

[supersunbird]

there must be someway of getting better interest rate. i actually DO have a squeaky clean credit record for 4 years, come on!would it have helped if I had a bigger deposit?I did some research and saw that if you're not buying for over 1 mil then ur interest rates are gonna suck.sigh the poor have no chance

Since you didn't answer let me just make sure you use the option if you haven't, have you tried SA Homeloans?

 

[BBSA]

there must be someway of getting better interest rate. i actually DO have a squeaky clean credit record for 4 years, come on!would it have helped if I had a bigger deposit?I did some research and saw that if you're not buying for over 1 mil then ur interest rates are gonna suck.sigh the poor have no chance

Prime + .6% is actual good. The days of prime less 2 is long gone.

 

[ToxicBunny]

Prime + anything less than 1% is a pretty good rate...

I fought LONG and hard with Nedbank to get mine down to Prime - 0.05%

 

[Scooby_Doo]

I got prime minus 0.85 from FNB... First time buyer.

But I did have a high deposit, I am guessing the higher the deposit the better for you lend rate.

 

[Paul_S]

Prime + .6% is actual good. The days of prime less 2 is long gone.

I only managed to get prime + 0.5% (actually JIBAR equivalent) from SA Home Loans in 2008.
That is with a squeaky clean credit record and a 20% deposit.
ABSA wanted prime +1%
Nedbank wanted prime +4.5%

It seems that prime minus anything is reserved for people with a very low risk profile (big salaries with a Masters or Doctors degree).

 

[Icarium]

Maybe I should have shopped around when I bought. STD gave me prime -1.35 but I didn't try and negotiate or shop around.

 

[Waaib]

Can I renegotiate the interest rate later?

Yes you can. Once you have paid off some of the loan you can ask to be re-assessed. The banks look at what you earn vs what the repayment is. If that ratio changes they can re-assess. Some have rules about how often you can do this eg. only once per year or only every 6 months.

Lets say you earn R10,000 per month and your repayment is R3000. that means 30% of your income goes to the loan. If you pay off some of it and apply it to the bond then your repayment could drop to 20% of your income. The bank now has less risk in giving you the loan so can re-assess and give you a better rate. I've been through this process once with FNB.

 

[broken1]

Yes you can. Once you have paid off some of the loan you can ask to be re-assessed. The banks look at what you earn vs what the repayment is. If that ratio changes they can re-assess. Some have rules about how often you can do this eg. only once per year or only every 6 months.

Lets say you earn R10,000 per month and your repayment is R3000. that means 30% of your income goes to the loan. If you pay off some of it and apply it to the bond then your repayment could drop to 20% of your income. The bank now has less risk in giving you the loan so can re-assess and give you a better rate. I've been through this process once with FNB.

Who do you contact to renegotiate the rate? Homeloans call centre?

Is there a cost involved?

 

[Waaib]

Who do you contact to renegotiate the rate? Homeloans call centre?

Is there a cost involved?

I used the call centre and wasn't charged that I remember.