Since their advent in 1999, bond originators have made a business out of taking the hassle out of securing home finance by helping homebuyers navigate the lending laws, doing the application paperwork and securing the lowest bond interest rate - all at no charge.
With the average house price creeping towards R1, 000,000 more people, especially first-time buyers, are planning on sharing a mortgage with a friend, sibling or partner.
Mortgage originators are collectively saving South African consumers R30bn a year in interest charges through lower home financing costs. This is thanks to the discounts to the prime lending rate originators achieve by shopping around at various banks on behalf of homebuyers to secure the lowest borrowing rates possible says the company that started bond origination in South Africa in 1999.
The implementation of the National Credit Act in June this year caused a slowdown in mortgage approvals as banks and applicants adjusted to the new regulations - but now SA's leading originator reports that approvals are returning to pre-NCA levels.
Young people are putting off buying their first home for social reasons as well as financial ones according to UK research, a phenomenon that is evident in South Africa too. Saul Geffen, Chief Executive of MortgageSA, South Africa's leading mortgage originator says that while high prices are obviously a deterrent to young people getting onto the property ladder, huge lifestyle changes and priority shifts are a major factor.
The property market's rapid price escalation has cooled in the last year on the back of higher interest rates and the short term effects of the National Credit Act (NCA), but these factors are conspiring to provide a 'sweet spot' for buyers says SA's leading bond originator.
Property is a worthwhile investment but for younger people hoping to buy it is difficult to take the first step, but not impossible says Rhys Dyer, Chief Executive of ooba, South Africa's leading bond originator that places one in five South Africans in their homes.
International research shows people spend more time deciding on computers & holidays than homes. A home is one of the biggest purchases most of us will ever make and yet many of us rush into the buying decision only to regret it later on.
Despite the buyer's market in the property industry at the moment, in the wake of the global economic downturn, banks are still wary of granting 100% home loans. In light of this, if you're considering buying a home, it's a good idea to start saving up for a decent deposit.
If you're thinking about buying your first home, get your financial affairs in order as soon as possible. You need a clean credit record to secure a home loan. Unless you have a clean record of servicing debt, your bank will be unlikely to grant you a home loan.
It's a property-buyer's market, but before you start searching, you should think about your needs five years down the line to avoid having to sell and buy again too soon.