Frequently Asked Questions

Guidelines for first time home buyers and general home buyers' information.

Does a poor credit record affect a joint home loan application if only one of the applicants has a listing against their name?

Banks are guided by the National Credit act in the granting of credit to applicants, so an impaired credit rating of any of the joint applicants can affect the outcome of a joint home loan application. 

The bank’s credit decision will depend on the strength of the remaining applicant’s information and on how often and how severe the listings are on the credit record of the second applicant.

For instance, a once-off default on a small retail account that can be explained will not have as serious an effect as a credit record with many defaults over a period of time.

The different banks use different processes to assess applications, so the extent to which a poor credit record will affect the outcome will vary from bank to bank.

However, if either of the applicants has been blacklisted or is under a formal rehabilitation programme, the banks will not approve the loan as a joint application. Banks’ credit policies are bound by the National Credit Act, which states that no person who has been blacklisted may be granted credit.

If you are considering buying a property with a partner but have concerns about one person’s credit record, it’s a good idea to get prequalified before applying for a home loan. When you are assessed for prequalification, a credit check will be run against your name, and your overall affordability will be calculated.

ooba’s prequalification service – oobaqualified – takes things a step further by helping you to do whatever you can to improve a bad credit record, and assisting you in consolidating your existing debts to improve your affordability.

In addition, by submitting your home loan application to multiple banks simultaneously, ooba has the best chance of securing you a home loan from whichever bank has the least stringent lending criteria.

 

Bond repayments and interest rates

Question:

I am considering applying for a home loan and would like advice on the following: If I get a loan of R1 200 000 at Prime, i.e. 8.5%, I would have a monthly repayment of R 8 500. This is what the banks' online calculation tools tell me. However, what percentage of this R 8 500 actually goes toward paying of the bond capital, i.e. R1 200 000, and what percentage is just interest?

 

Answer:

For a home loan of R1 200 000 at prime (8.5%) over a 20-year term, with no deposit, the monthly repayment would be R10 414.  In the first month, the interest portion of the repayment is R8 500 and the capital reduction (the amount you are paying back towards the actual cost of the property) is R1 914. The interest portion reduces every month thereafter, and the capital reduction increases.

If it were possible to secure a reduced interest rate of 8%, then over 20 years with no deposit, the monthly repayment would be R10 037, of which the interest payment in the first month would be R8 000, reducing monthly thereafter, while the capital reduction would increase. 

It is also extremely beneficial for you to allocate whatever money you can to a deposit when making an offer on a property for two reasons: first, because it will increase the likelihood of your bond application being approved by a bank, and secondly because it significantly decreases your repayments. 

With a 5% deposit - R60 000 on a R1 200 000 property - at prime interest over 20 years, the monthly bond repayment reduces to R9 893. Even a R20 000 deposit on a R1 200 000 million home loan will reduce your total repayments by R41 656 over 20 years. 

An expert mortgage originator can negotiate on your behalf with the banks to get the lowest possible interest rate for you, and will help you to structure your home loan in the best way to suit your requirements

Try ooba's bond repayment calculator, as well as other calculators relating to home loans to get more insight.

Joint bond partnerships

Question:

I would like find out about how to get a joint bond with a partner even though we are not married?

 

Answer:

Investing in property is usually the biggest financial commitment that any individual will make. Increasingly, people are looking to purchase a home with a friend, sibling or partner to halve the costs and increase the likelihood of bond approval. 

Because the individual burden of bond repayments is halved, obviously the requirements of each partner are lessened. This is called joint affordability – simply put, you each only have to be able to afford half the house. Nonetheless, both partners will be individually assessed; they will need to provide proof of income and have their credit record checked. 

As with any other big commitment, buying a property with someone else is not a decision that should be taken lightly. The partners need to have worked out all the ins and outs of the process before putting pen to offer. 

Both parties should sit down for a serious discussion before the potential property has been identified and the excitement could cloud judgment, and consider what will happen to the property in various different scenarios, for instance if one partner wants to leave or in the unfortunate event that one partner dies. 

The decisions should be made, and then, once the home is purchased, committed to paper – either a contract between the two partners or a will drawn up by a lawyer. Unfortunately, the one thing that co-ownership won't save the partners is paperwork.

Both parties should be willing to disclose any financial issues that might affect the partnership, as they will naturally have to be independently subject to all the same financial assessments by the bank as individual buyers.

The partners who have bought a property together should then either ensure that the costs of buying and maintaining the property are equally shared. If this is not possible, then it is important to keep careful track of both parties' expenses in relation to the property so that the proceeds can be split fairly when the property is sold.

Credit score and how it affects your application

Question

I have a poor credit score because of wrong decisions made in the past. In the meantime, I got a job that pays above the average and want to apply for a home loan. Would I qualify and what advice do you have?

 

Answer: 

Banks require a clean credit record before they will consider approving your home loan application. 

The best thing that you can do is approach a credit rehabilitation company like Lucid Clear Credit, who can advise you on what steps you can take to improve your credit score. 

Until your record is cleared, ensure that you don’t get into any further financial difficulties. Make sure that you pay back any credit like credit cards, store cards, car finance, and debts like doctor’s bills on time and in full. 

In the meantime, you say that you are now earning well. You can further improve your future chances of securing a home loan if you save up for a deposit. As I have said before, banks will not consider a home loan application if the applicant does not have a clean record, but once yours is clean, a deposit will make the banks more likely to look favourably upon your application. 

Then, to further improve your chances of approval, use the expertise of a bond originator like ooba to present your application in the best possible light to multiple banks and to get you the best interest rate. 

Home loan success and saving for your deposit

Question:

How can consumers improve their chances of getting a home loan? Also, how much do you need to save for a deposit?

 

Answer:

Generally, the lower the borrower’s risk, the higher the chance of approval on the bond and the better rate concession will be offered. In calculating risk, the bank will include factors such as the loan-to-value ratio (the amount of deposit you are willing to put down), the size of the loan, as well as the repayment-to-income ratio (the ratio between the bond payment and the buyer’s income). 

The size of the bond that you apply for, your credit history and the value of the property you intend buying are some of the factors that affect the rate you will be offered. To improve your chances of getting a home loan, it is advisable that you shop around with multiple lenders.

According to the latest ooba statistics, 27.9% of applications in March 2013 that were declined by one lender were approved by another, indicating that it is important to approach multiple lenders to ensure a positive outcome on your home loan. The most efficient way to do this is by using the services of a bond originator.

Although it is possible to have your home loan application approved with no deposit, it is less likely given the more stringent lending criteria than was applied in the past. The average ooba home loan deposit was 13.4% of the purchase price in March 2013.  

Besides improving your chances of getting your home loan approved, a bigger deposit could result in a more favourable bond rate which will save you in interest over the term of the loan. As a home loan is paid back over a long period, generally between 20 and 25 years, even a small deduction in the interest rate on a bond, can save you thousands in interest payments over time.

I’m starting to hunt for a new home. What are the benefits of getting prequalified?

Marius Crook, ooba Western Cape sales manager, answers:

Prequalification is your most useful tool when house hunting. When you apply for prequalification, your affordability is assessed and your credit rating is checked. Once complete, prequalification will give you the assurance that you can house hunt in a certain price bracket, that your credit rating is clean, and that, in all likelihood, the banks will approve your home loan.

This makes you a more confident home buyer and gives the sellers and their estate agents more confidence in you. And, when you get to the point of making an offer, valuable time will have been saved because you will already have processed all the paperwork.

ooba’s prequalification service “oobaqualified” takes things a step further with regards to pre approved home loans. If there is a black listing against your name or you have an otherwise poor credit rating, ooba will support you in identifying ways to improve your credit record or remove the blacklisting if proper procedures weren’t followed.

In addition, if the amount that you were prequalified for is lower than the price range you were hoping to search in, ooba can also help advise you on options to consolidate your existing debt, so that you have a greater disposable income to allocate towards your home purchase.

oobaqualification costs the applicant nothing, but gains you a wealth of knowledge, confidence and time.

IN addition, ooba has a host of home loan calculators and other resources available to help you determine the potential cost of your home loan when planning and budgeting.

I am getting ready to buy my first home, and I know about the documentation required. I understand how to fill in an Income and Expenditure form, but I am a bit confused by the Assets and Liabilities document. What are assets and what are liabilities?

Linda rall, ooba’s KZN provincial sales manager, answers:

Just as an Income and Expenditure form covers everything you earn and spend, an Assets and Liabilities form covers everything you own and owe. With these two forms, the banks can get a full picture of your financial standing. Remember that full disclosure is a legal requirement, so it’s important to be completely honest, and to have all the information that you need to hand, so that you’re not using guesswork.

Assets

Your assets are everything that you own. This ranges from the obvious, including your car, any other properties you may own, as well as all your personal items like jewelry, furniture and clothing. Try to remember any specific items of great worth that you own – like engagement rings, Kruger Rand coins or any other high-value items.

Remember that loan accounts, share portfolios, retirement annuities and unit trusts are all assets, and should be listed, as is the surrender value of any insurance or endowment policy that you may hold. If someone owes you money, that amount counts as an asset as well. Have a valuation of all of these prepared for when you are filling out your home loan or pre-approval application.

And you should list the positive balance in your bank account or in any savings or fixed deposit accounts.

Liabilities

Liabilities are more often overlooked, so remember to total up all your short-term loans and contractual debt in your name as well as outstanding balances on your retail accounts and store or bank issued credit cards.

Remember that although you may have listed your car as an asset, any money still owed on your vehicle finance is a liability and the outstanding balance your vehicle finance account must be listed here.

You should also mention any significant amount of money that you owe to anyone else, including to shops where you might have purchased furniture or electronics over a certain term.

And list the amount you owe on your overdraft or any other short term loans at your bank.  But if any of this is confusing to you, consult with an ooba expert on your specific queries on our website, over live chat or on the phone, and we’ll get right back to you.

 

 

 

 

The reason the bank has given for the initial decline on my home loan was due to my scorecard. Please explain what is meant by a scorecard?

Kay Geldenhuys, Property Finance Processing Manager at ooba answers:

A common method which banks utilise for predicting credit risk is through their credit scorecard. The scorecard is a statistically based model for attributing a number (score) to an applicant which indicates the predicted probability that the customer will exhibit a certain behaviour. In calculating the score, a range of data sources is used, including data from the home loan application form, from credit bureaux and, where applicable, from products the customer already holds with the lender.    

Banks have been utilising and developing their scorecard over many years of credit lending and therefore have access to a huge range of scorecard data which is utilised to predict behaviour.  Banks’ individual credit policies rules and regulatory requirements are also included in their credit scorecard results.

Kay Geldenhuys, Property Finance Processing Manager at ooba answers:

A common method which banks utilise for predicting credit risk is through their credit scorecard. The scorecard is a statistically based model for attributing a number (score) to an applicant which indicates the predicted probability that the customer will exhibit a certain behaviour. In calculating the score, a range of data sources is used, including data from the home loan application form, from credit bureaux and, where applicable, from products the customer already holds with the lender.    Banks have been utilising and developing their scorecard over many years of credit lending and therefore have access to a huge range of scorecard data which is utilised to predict behaviour.  Banks’ individual credit policies rules and regulatory requirements are also included in their credit scorecard results.

I’m beginning my house hunt, but I’m not sure whether the bank is going to give me a bond in the price range I’m looking. How do the banks determine whether they think I can afford a house?

Tanusha Kuni, ooba elite homeloan consultant answers:

When a bank considers your bond application, they determine affordability in one of two ways. The first is called “return to income” and the second is determining your net surplus income.

Return to income means that your monthly bond repayment is compared to your gross monthly salary, and worked out as a percentage.  In most cases, the bank will not allow your bond repayment to be more than 30% of your gross monthly income.

For banks to determine your net surplus income, they calculate your gross salary minus your deductions, including existing bond repayments, vehicle repayments, personal loan repayments, 5% of your credit card limit, 5% of your overdraft limit and the repayment of your retail accounts.

Then they deduct your declared monthly expenses to work out what you have left over – a surplus – which you can use as your bond repayment. This amount is then multiplied over the number of months you’d be paying back your home loan, taking into account the interest rate, to determine the size of home loan that you’d qualify for.

If the property is being bought by two partners, then both their incomes will be used to assess the qualification, and a credit check is run on both parties.

The ooba website bond affordability calculator  asks for your income, deductions and expenses, and calculates this for you. You can also apply to ooba for a pre-approval, so that you know exactly what price house you can hunt for. 

My husband and I have been living in our house for a while, and we're going to stay here for the forseeable future, so we've decided to do some renovations. We're not sure about the best way to finance this, though. Could you please advise?

Tracy Matthysen, ooba home finance expert, answers:

If you still have a bond on your property, you can apply for a further loan through the bank at which your bond is held. In much the same way as when you applied for your bond, you will need to produce a salary slip and a proof of income, and fill out assets and liabilities and monthly income and expenses forms.

 ooba can assist you with the paperwork and process, to present your application to the bank in the best possible light.

Alternatively, you can speak to your bank about extending the term of your loan to give you more time with slightly lower repayments, which will free up more capital towards your renovation, or you can apply at your bank for a personal loan or overdraft to cover the building expenses.

If you own your home , you have settled your bond and are in possession of the title deed , ooba can help you to apply to multiple banks so that you can compare their offerings. 

Rather than buying a new home, my husband and I thought we would get the finance to build a home of our own on a piece of that my family owns, but we have no idea about how this process works. Is it the same as a regular bond application process? What do

Lizette Marais, ooba’s Mpumalanga sales manager answers:

Building a new home is an exciting and challenging prospect. The first thing you will need to do is work out how much you can afford. This part is the same as applying for a regular home loan – you will need to produce a salary slip and six months’ bank statements, and fill out an assets and liabilities form, and calculate your monthly expenses to work out the surplus that you have to spend on your bond repayments.

Most banks won’t grant a bond for which the monthly repayments total more than 30% of your gross monthly income.

You can use the home loan calculators, as well as other home finance calculators to work out exactly how much you can afford.

You should hire a developer or architect to manage the process for you, and they will call in the services of an NHBRC-registered builder or work with a builder that you have identified. The bank will not release the funds if the builder is not NHBRC registered.

These parties will then draw up plans and a quotation in line with your budget – some negotiation may be necessary at this point – and you can then apply for the loan in line with your plans.

Remember that very few building projects go according to plan, so always leave some contingency for unexpected expenses.

Building payments are made in a series of steps, and for the bank to release the funds to the builder at each stage, you will have to sign a document stating that you are satisfied with the progress. The bank retains a final sum – the retention amount – until the building is completed to your satisfaction.

As with any other home loan application, the ooba experts are available to guide you through the process and send your application to a number of different banks to increase your chances of approval and to secure you the best possible interest rate. 

My boyfriend and I want to buy a house together. I already own a home and have almost paid off my bond in full after three years. Will this benefit us in the interest rate we receive when applying for the new loan?

Eleanor Van Der Merwe, ooba regional sales manager, answers:

Your excellent track record of repayment of your existing bond will certainly have a positive effect on your new application. The interest rate charged is always based on the banks’ risk assessment which takes into account your credit track record and affordability. To get the best results out of the credit scoring on a joint application, it is advisable for the highest earner to be the primary applicant because, as mentioned, the credit scoring can influence the interest rate offered. 

 

I own a majority share in our family home, and I would like to put it on the market, but my siblings are reluctant to sell. Is it possible to sell only my share in the family home?

It is possible to sell a share in a family home where the other shares are held by family members, but the sale can be restricted by the type of property, the way in which the shared property was created (for example whether it was a will or a trust), the practical implications as to use of the property, any bonds over the property and the entity the property may be held in.

Assuming it is a normal residential property where the shares are held in all the siblings’ individual names, you could sign an offer to purchase, selling your share to a buyer for a specified price. Conveyancers would then record the share in the new part-owner’s name on the title deed.

The only concern form there onwards would be how the new owner would fit in with the other family property shareholders. If it is leased to a third party, it could well just be an investment set up for the new part-owner. If it is used as a residence for the other family members, it could create an awkward living arrangement that a buyer might not wish to take on.

 

As individual circumstances may vary, it is a very good idea to consult an attorney for professional advice about your specific situation.

I am buying a new house and would like to know whether the bank that grants my bond can force me to take out life cover on the value of the bond?

Certain banks do impose mandatory life cover for applications that are approved for clients whose total gross salaries are less than a set amount. Certain banks also impose mandatory life cover where either the registered bond amount or the purchase price of the property are less than a set amount.

Regardless of whether the bank makes life cover mandatory, we strongly recommend having it in place. Having life cover will mean that should you pass away, your estate and your family will not be left with the financial burden of having to pay off your bond or sell the property to cover the costs.

What many people don’t know is that they are not obliged to take the life cover that their bank offers. You do have freedom of choice as to which insurer you would like to purchase your cover from.

It is very important to remember, though, that if you have existing life cover in place before you buy the property, you should purchase additional life cover for the cost of the debt. If you don’t do this, and your life cover is used to pay off the home loan debt, you will have depleted the cover amount for what it was originally put in place for, such as schooling, food, petrol, rates, electricity, water and so on.

As for the type of insurance you should take out, you have two options. You can either increase your existing life cover to cover the additional debt amount, or you can take out credit life cover, which covers the specific debt, and your life cover can remain in place for what it was originally meant to cover.

 

What are the benefits of using ooba?

By using ooba, you'll avoid the red tape involved in going from bank to bank, dealing with tedious and repetitive paperwork, and not knowing whether you're getting the best home loan deal. We know the banks, understand the system and will hunt down the best deal for you.

Whether you are buying a home for the first time or looking to register a second bond, with ooba, your home finance expert will process the home loan application as quickly as possible on your behalf, ensuring that you get the right bond for your circumstances, and reducing the hassle factor. We submit your application electronically to all the major banks simultaneously, ensuring that your home loan is approved at the best possible rate.

Since 1998, ooba has secured more than R200 billion in home loans for our clients. This means we can put our weight behind your application. So you won't have that little guy at the back of the queue kind of feeling. We're skilled negotiators and masters at presenting your application in the best possible way. Several banks compete for your business. That can only mean a better deal. And a better chance of approval. We know our stuff, so you don't have to worry. Independent. Straight-talking. And for free. Plus, oobainsure can advise you on certain essential insurance plans that you should be considering.

Browse ooba's home loan calculators, including bond addordability & bond repayments, as well as current mortgage interest rates from South Africa’s leading bond originator.

What makes ooba different to other home loan brokers?

oobabond is the only full service bond origination company in South Africa, capable of handling the entire home loan approval process, with a national infrastructure and proprietary software to automate the application. This makes going through ooba a great convenience.

We can also offer you advice on other issues related to owning a home. oobainsure offers insurance packages that consider all your needs as a property owner.

Are there any costs, if I use oobabond?

No, there are no costs. The banks pay ooba an outsourcing fee to complete the application process.

If I'm pre-qualified through oobabond, how will I get a full loan grant after I have made an Offer to Purchase?

All you have to do is inform your dedicated ooba property finance expert and they will complete the application process on your behalf.

Can I purchase a property in South Africa if I am a non-resident?

A non-resident of South Africa is a person (i.e. natural person or legal entity) whose normal place of residence, domicile or registration is outside the Common Monetary Area. The Common Monetary Area consists of South Africa, Lesotho, Namibia and Swaziland. Non-residents may purchase property in South Africa but in terms of Exchange Control Regulation 3.1 (f) they may not be granted any financial assistance - e.g. a home loan. However, the South African Reserve Bank will consider requests by non-residents for bond facilities not exceeding 100% of your borrowing base.

The "borrowing base" of a non-resident is the sum introduced into South Africa to fund the purchase of a property. For instance, if as a non-resident, you wanted to purchase a property in South Africa for ZAR600 000,00, provided you are able to bring ZAR300 000,00 into South Africa to effect the purchase, you would be able to apply to the Reserve Bank for permission to apply for a bond of ZAR300 000,00. In other words, 50% mortgage loans are available to non-residents. It must, however, also be borne in mind that the banks will only grant a bond of 50% of their valuation of the property, which in some instances might not equal 50% of the purchase price. All requests of this nature must be routed via a commercial bank and not directly with the South African Reserve Bank.

You would need to provide proof of the fact that the funds have physically come into the country (which can be done by the Transferring / Conveyancing Attorney), so that when the property is sold, the deposit plus profit can be released. The title deed will be endorsed "non-res". As a non-resident, you are not required to open a banking account in South Africa, although certain banks do insist on it, as this would facilitate the transferal of funds directly from your account abroad into your mortgage account in South Africa. If you open a banking account - particularly if an access facility is required for the capital paid off - then you would need to obtain an original letter of credibility from your bank.

As Exchange Control is complex, it is advisable for non-residents to consult with an ooba home finance expert, to guide you through the process.

If I am a temporary resident in South Africa, can I purchase a property in SA?

Foreign Nationals (temporary residents) may apply for local financial assistance, including a bond for the purchase of residential property. Such a bond is not restricted and, depending on the standing of the client, it can amount to 100% of the purchase price of the property. The granting of any borrowing facility is subject to the approval of the Lending Manager in the branch of the bank where the foreign national holds his or her account.

It is important to note that when a foreign national departs the Republic of South Africa, the criteria for Non-Resident purchasers will apply and the bond may have to be reduced to fall into line with the South African Reserve Bank's formula requirements.

Please talk to one of our experienced ooba home finance experts to help you to negotiate your application for bond finance.

If I am a South African Resident working abroad, can I apply for bond finance to purchase a property in SA?

Yes, if you are a SA resident working abroad, an 80% mortgage bond can be secured. Most banks will look at granting up to an 80% loan but each application is reviewed on individual merit. Certain clients have been granted 100% finance, in exceptional circumstances.

You must only be living abroad temporarily and must have plans to return to South Africa. In addition, an application to emigrate must not have been made, nor should you have surrendered your permanent residency status in South Africa. Please consult one of our experienced ooba home loan finance experts to assist you.

ooba Has a host of home loan calculators and other resources available to help you determine the potential cost of your home loan when planning and budgeting.

Will I get the same interest rates as if I applied through the bank directly?

Amongst other things, your credit profile, affordability and loan-to-value ratio determine your interest rate on your bond. All these details are captured into the bank's credit scoring models and your interest rate is calculated. Whether you apply personally to the bank, or through oobabond, the same credit scoring model is used to determine your interest rate.

However, with ooba, you'll have a home finance expert motivating on your behalf for your home loan, applying to more than one bank on your behalf, and ensuring that you don't have to deal with too much paperwork.

ooba Has a host of home loan calculators and other resources available to help you determine the potential cost of your home loan when planning and budgeting.

Is there any obligation to accept a home loan sourced by oobabond?

No. If we source a bond on your behalf, you can accept or decline it. You're not obliged in any way.

What if I already have a pre-qualification from another bank?

ooba can complete the application process on your behalf - or we can investigate the possibility of getting a competitive rate from another bank.

Do I have to apply online?

You can either apply online or by using the "please call me" form on this website - and an ooba home finance expert will contact you.

After I apply for a loan online, what should I expect?

When we receive your home loan application, a credit check will be performed and an ooba home finance expert will contact you to collate any supporting documentation needed by the bank to complete the process. Your application will be submitted electronically to all the banks that have products suited to your profile and affordability.

If all goes well, the bank will approve your application in principle. A quotation setting out the cost of credit, interest rate applicable and special conditions will be issued following successful assessment of the property.

Browse ooba's home loan calculators, including bond addordability & bond repayments, as well as current mortgage interest rates from South Africa’s leading bond originator.

How long will it take to get a home loan approved? (in principle)

Usually, home loan applications are approved in principle within a couple of days, as long as all of the necessary documentation has been sent to us.

How will I be able to track my application status?

Your ooba home finance expert will keep you in the loop throughout the entire process. If you have any questions at any time, they'll be able to answer them.

Who will see my application?

Only those parties involved in processing your application will view your application details.

When will I need to contact a home finance expert?

When you want to get pre-qualified for a bond, or if you're ready to apply for a bond, just complete the call me form and an ooba home finance expert with contact you.

Why have we changed the name of the company from MortgageSA to ooba?

There are a number of reasons for changing the name of the company but the primary reasons are :

When MortgageSA pioneered mortgage origination in 1998, we had a one service offer. Currently we have evolved to a multi-product & services offering that extends beyond mortgage origination.

The MortgageSA name was restrictive in meaning in that it was descriptive of the mortgage origination business only, and was difficult to stretch outside of mortgage financing.

What does the ooba brand name stand for?

It stands for a brand that promises to get you closer to the ideal home, the 'super' life.

Can I use my own attorney for the bond?

Banks have a panel of  attorney firms from which the Bank will appoint a firm to supervise the registration of the bond on the bank’s behalf. These attorney firms have to comply with the conveyancing requirements of the relevant Bank and therefore Banks will usually not allow the nomination of another attorney firm.

What period of time should I get an extension from the Seller for the bond approval?

A buyer should negotiate with the Seller for as much time as possible to obtain a bond approval to allow for instances where the banks may require additional documentation from the buyer to make a credit decision and/or to allow the buyer to shop around for the best home loan deal.

What interest rate can you obtain for me from the bank?

As part of ooba’s service offering, we will negotiate a competitive rate for your home loan from the bank.  The bank will base your rate on your credit risk profile, the size of your home loan and the size of the deposit you are placing.

ooba Has a host of home loan calculators and other resources available to help you determine the potential cost of your home loan when planning and budgeting.

Do I have to take a 20 year term?

You can apply for any loan term up to a maximum of 30 years.  The shorter your loan term on your home loan, the higher your monthly instalment repayment will be but will result in a saving of total interest paid in comparison to a longer term loan. 

ooba Has a host of home loan calculators and other resources available to help you determine the potential cost of your home loan when planning and budgeting.

How do I best use my access facility as a savings mechanism?

An Access Facility on your mortgage loan allows you to be able to deposit extra funds to your home loan that you have over and above the minimum required installment and is a very effective way to save as, by reducing the outstanding balance on your mortgage loan, you will reduce the interest that you pay.  You are therefore effectively saving at the bond interest rate, which is considerably higher than the interest earned on a savings account at a financial institution, whilst still permitting you the flexibility of withdrawing your savings when needed.  Naturally, by exercising the discipline of not withdrawing your savings, your will be making capital repayments to your loan, which will enable you to repay the loan over a shorter term, resulting in a saving of total interest paid.

How can I reduce the interest and the loan term i.e. amortization?

Interest on a mortgage loan is calculated daily and compounded monthly on the outstanding balance.  Therefore, should you make additional repayments to your home loan over and above the minimum required installment, you will reduce the outstanding balance and reduce the interest you pay.  This will enable you to repay the loan over a shorter term, resulting in a saving of total interest paid.

Who pays ooba’s fee?

On registration of the bond, ooba is paid a fee by the lender for the functions that it performs on behalf of the lender in respect of the home loan application process.