Absa survey reveals the need for pre-application consultation by home mortgage loan applicants

The recently published ABSA Home Owner Insights Survey has, says Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, confirmed what he and his team members have regularly advocated, i.e. that the majority of home buyers should seek the guidance of an experienced mortgage bond originator such as Rawson Finance prior to entering the market in search of a new home.

“I would go so far as to say that those who go ahead with hunting for a home without first consulting a bond originator or a bank are setting themselves up for severe disappointments, considerable extra stress and much loss of time,” said van Alphen.

“The survey, which, as is usual with ABSA,” added van Alphen, “was very comprehensively carried out, revealed that 37% of buyers have to reassess their choices on account of having initially aimed too high above what they could afford.  This would not have happened if at an early stage they had consulted with a bond originator rather leaving it to later when they may well have looked at and grown interested in a number of properties.”

In many cases, said van Alphen, it is a failure to appreciate the extent of the extra upfront costs such as registration, transfer and initiation fees which may make a reassessment necessary and this would not have happened had pre-qualifications been carried out with a bond originator - as all 'hidden’ costs and repayment options are disclosed and discussed with the potential homeowner.

Then, too, said van Alphen, the bank survey shows that over 80% of home buyers are stressed about whether the bank will approve the loan and by the whole home loan process.  These anxieties, he said, can be much reduced if, again, they pre-qualify themselves with the help of a bond originator.

“The survey goes on to say that,” said van Alphen, “a staggering 57% are declined on account of credit and affordability inadequacies.”

This, again, he said, indicates that the initial investigation was not thoroughly carried out and had the applicant liaised with a competent bond originator his chances of being successful would have been between 65 and 70%.

“One has to appreciate,” said van Alphen, “that the banks, having been badly burned in the previous downturn, are now operating with an understandable caution, but once this is fully understood and with the help of a bond originator, a realistic approach is adopted, success in bond applications is not that difficult to achieve.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us