Originators vital to speed up housing delivery

Housing developers will be hard-pushed to meet the huge pent-up demand for affordable homes – and create thousands of jobs in the process - without the help of mortgage originators.
So says Rudi Botha, CEO of leading originator Betterbond, who notes: “All eyes are currently on the so-called gap market, which is individuals or households earning between R9000 and R16 000 a month who can afford homes costing about R600 000 and less.
“And with the transfer duty threshold having recently been adjusted to exempt such homes from transfer tax and the government on the verge of introducing a mortgage indemnity fund to stimulate bank lending to this type of buyer, it should be all-systems-go to start eliminating the housing backlog.”
The trouble is, he says, that there just aren’t enough homes to meet the demand in this sector of the market, which is also being fuelled by low interest rates – “and that developers are unlikely to be able to get on and provide them without the help of originators to speed up homebuyers’ access to finance”.
Botha notes that the success of a new development generally hinges on how fast the new homes can be sold and transferred  - which in turn requires that lots of “end users” or homebuyers have quick access to home loans at competitive interest rates.
“Which is where the help of originators – at no cost to the developer - becomes invaluable. In the first place, we provide major assistance in the administration of home loan applications. Our experience is that the rate of conversion in this sector is pretty low, and that there is a lot of wastage unless applicants are pre-screened. So we do all the credit and affordability checking before applications are made, and we also manage all the supporting documentation for each application.
“In addition, we can make multiple applications using a single document, which further streamlines the application process and improves the chances of each applicant being granted a loan.”
What is more, he says, there are other big benefits for consumers in having an originator on hand when buying in a new development. These include the provision of information about the “hidden” costs of buying a home and the home loan repayment process, impartial advice on the most appropriate home financing options, and assistance to obtain the most competitive interest rate possible – all at no charge to the consumer.

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