Home Loans are Like a Box of Chocolates
"Lending criteria and loan to values are fluctuating almost daily. Consumers need to be approaching every possible lender when trying to purchase a new home or consolidate their debt. If they don't, they could be missing out on saving themselves a fortune."
These are the words of Ian Wason, MD of independent mortgage brokerage Bondbusters, one of South Africa's leaders in the mortgage industry.
"It's never been more important for consumers to use a broker" he says. "By approaching all the lenders on your behalf, a broker will know which lender's criteria you will meet and, as a result, where you need to apply to get what you are looking for. " Wason cites a recent example that one of their clients was rejected for a further loan by their lender, but was offered a higher mortgage amount by an alternative one.
He stresses the point that each lender has very different approval criteria and that a decline from one bank won't necessarily result in a decline from another provider.
Commenting on the US sub-prime crisis that has begun what many believe to be the biggest recession since the Great Depression in 1929, Wason says that innovation is not the answer.
"People are asking about what innovative mortgage products could help fend off the effects of the subprime crisis, but the truth is that these innovative products are what got the international market into the state it is currently in. South African lenders need to contact their existing clients and give them more attention - if they can make people's repayments more affordable they can limit the number of defaulters and ensure some local market stability."
By the same token, says Wason, South African consumers should be shopping around the market, looking at any possible ways they can save themselves money on a mortgage or consolidating their short term debt.
"As a brokerage we approach all the South African lenders and I can tell you that the banks don't all have the same lending criteria. "
Wason adds that Bondbusters' debt consolidation product, a means for the consumer to saddle their other outstanding debt into their home loan, has seen a huge deal of interest in the last few months as more and more credit hungry South Africans are looking for ways to ease their debt woes.
"While we are in nowhere near the state that the US economy is currently in, we have a significant number of loan defaulters in South Africa. Personal loans, credit cards and store credit were all handed out too liberally in the past, but fortunately our stringent mortgage lending policies have meant that our mortgage market has not been exposed to any genuine sub-prime threat."
As a wholly independent mortgage brokerage, Bondbusters will assist its clients with their mortgage applications, applying to all South African mortgage lenders on behalf of their clients.
Use Justmoney to apply for a new mortgage, a better rate or to consolidate debt into your homeloan.