Originators Essential to Home Buying Process

Originators Essential to Home Buying Process

The latest statistics by ooba, South Africa's leading bond originator, have revealed that the effective bond approval rate through ooba has increased by 7.7% in the past year to 63.4%.

Whilst this is a significant improvement for the local residential property market, home buyers still face the chance of being declined by banks when applying for home loan finance.

According to the latest ooba statistics, 22.3% of applications in May 2011 that were declined by one lender were approved by another. Saul Geffen, CEO of ooba, says that this is why using a bond originator is essential. "Because a bond originator is able to shop the application to multiple lenders, homebuyers are assured a higher probability of approval and on competitive terms.

Additionally, duplication of documentation is avoided, ensuring a streamlined approval process with one point of contact." ooba's statistics show that 22.3% of applications would remain declined if they were not submitted to other banks post the initial bank decline. Geffen says that the tough credit environment and the National Credit Act has strengthened the role and the need for originators.

"Before the introduction of the National Credit Act (NCA) in 2007, the value proposition of using a bond originator was primarily centered around obtaining the best rate concession. The customer proposition has strengthened even further, as securing an approval has increased in importance."

The growth of the sector is supported by the recent ooba statistics, which revealed that the value of approved home loans via ooba increased by 55.9% during June 2011 in comparison to June 2010. In May, ooba saw a similar increase in the value of approved home loans. Geffen says that March recorded the highest level of applications in nearly three years (since May 2008) and was 36% higher than the average monthly application intake recorded in 2010.

The levels of approved home loans also reached a high in March 2011. "Our March figures were the highest value of approved home loans since October 2008, which was over two and a half years ago. We have now exceeded March's record in June."

He goes on to say that the mortgage origination industry in South Africa has been embraced by the banking sector and that there is unquestionably still a place for mortgage originators in the bank's home loan distribution channels. Mortgage origination offers the banks outsourced, variable cost distribution and, importantly, access to both retention of their own customers and acquisition of non-bank customers.

"Our banking partners recognise and support origination's value proposition to real estate, as a single point of contact for the home loan process, and the homebuyer's requirement for choice."

Hello ooba news

Employees fortunate enough to receive a bonus this December should consider putting a portion of their '13th cheques' towards paying off their home loans, before indulging in festive season spending.

Die swak huisleningsmark beperk tans die prysbewegings in die huismark.

Die swak huisleningsmark beperk tans die prysbewegings in die huismark.

Most South African consumers are unaware of their credit profile, which could put them at risk when applying for home-loan finance.

According to a recent poll conducted by ooba, South Africa's leading bond originator, three quarters of South African consumers are unaware of their credit profile. The poll revealed that 69% of respondents do not know their credit status.