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Private bankers vs bond originators for home finance

Is applying for a home loan through your private banker the best option, when you have an alternative with bond originators? We examine the pros and cons.

Private Banking

Article summary

  • Private bankers are the first port of call for many homebuyers, but their priority is to get a deal that’s good for their bank, not necessarily for you.
  • A bond originator, also known as a home loan comparison service, can apply to multiple banks on your behalf, and then negotiate with the banks to ensure you get the best rate.
  • A home loan comparison service gets paid a commission by the banks, so their service is completely free to the home buyer.

Homebuyers have a lot more options available to them now than they did in the old days. No longer are you reliant on your private banker (or previously, the bank manager) for home loan approval. Better yet, no longer do you have to go through the rigorous process of applying separately for a home loan to all the major banks. You can get a professional to do it for you with only one application. That’s where a home loan comparison service comes in.

Private banking versus a home loan comparison service

No doubt many prefer the familiarity of applying through their private banker, who they may already have a relationship with. Furthermore, if you act directly through your bank, you may assume that they will also be able to assist you more efficiently in any future issues you may have with the home loan.

On the other hand:

  • Your private banker’s first priority is to get the best deal for their bank.
  • If the application is rejected, you’ll have to apply to a different bank, or wait until circumstances between you and your bank change. In the meantime, you may lose out on your dream home.

Fortunately, you have alternatives, in the form of a bond originator (also known as a home loan comparison service). A bond originator can streamline the home application process and deal with all the banks on your behalf. Although they have a good relationship with all the major banks, they are not beholden to one particular bank; their objective is to get the best deal for you.

Advantages of using a bond originator include:

  • They will help you prepare a single application, and submit it to multiple banks on your behalf. Since the lending criteria varies among banks, you may have a higher chance of securing bond approval with certain banks, and some may even provide you with a more favourable interest rate.
  • They will help you gather all the necessary documents.
  • They can advise you on how to clear your credit record, which improves your chances of securing home loan approval.
  • They can get you prequalified, which means they assess your chances of qualifying for a home loan, and provide you with a solid idea of what you can afford. You can get prequalified by an expert at ooba home loans, or use their free, online, DIY prequalification tool, the Bond Indicator.
  • Help you formulate a plan for applying again if your home loan application gets rejected.

A bond originator boosts your chance of success

While you may have a good relationship with your private banker, statistics show that using a home loan comparison service like ooba home loans increases your likelihood of getting a home loan by 36%.

The service is free

A bond originator doesn’t get paid by you, they get paid by the banks. They‘ll provide you with multiple quotes from the banks, but once a home loan is approved, they receive a commission from the bank for a successful deal, rather than charging the client.

All of these factors contribute to a higher success rate, as well as a smoother home loan application process. In addition to this, ooba home loans – South Africa’s largest home loan comparison service, offers a range of tools that make the home buying process easier. Start with their home loan calculators; then use their free, online, DIY prequalification tool, the ooba Bond Indicator, to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.

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Ooba home loans services are simply the best. My Consultant Bianca Dancer was so hands on and helpful from the get go. She guided me through the entire process and put me at ease being a first time buyer. I highly recommend their services.

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Jay Govender and Maleshini Reddy from OOBA provided outstanding assistance and guidance in securing our home loan. Response times were excellent and they were professional and friendly.

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Estelle Vorster was really helpful in securing the best deal for my home loan, she not only negotiated a lower interest rate she went as far as securing 50% discount on the transfer costs.

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