Getting your own property may be one of the biggest purchases you’ll make in your life. This is why it’s important that you’re well-informed about the home-buying process. A mortgage is essentially a secured loan offering that is specifically tailored to assist in buying residential properties.
You need to do thorough research before you apply for a mortgage. You need to have a clear idea about how the financial institution of your choice works.
Ask your lender about estimated closing costs, loan origination fees and transaction fees.
Make side-by-side comparisons of all the costs before your decide. Use your leverage to negotiate for the best mortgage deals possible.
Your credit score will help to determine whether you qualify for the loan and what rate you’ll pay on your loan. You can improve your credit score to meet the minimum credit score requirements.
By paying a large deposit on your home you might have a shorter repayment term as well as favourable interest rates.
Another important factor to consider is the mortgage interest rate.
This is why it’s important to compare mortgage interest rates from banks in South Africa.
The interest rate is dependent on a number of factors such as the loan to value ratio; your repayment to income; your credit profile and the size of your bond.
You will have the option to choose between a flexible and a fixed interest rate.
Comparing mortgage interest rates from banks in South Africa:
Standard Bank 10.5%
Absa Home Loan interest rate is based on your personal risk profile and the property details.
Choosing a variable interest rate is a good option if you think interest rates will be dropping in the short to medium term. Your repayments will be affected by fluctuations in the prime interest rate.
A fixed interest rate comes with the advantage of having consistent payments every month.