Home Loan Tips

Tips to consider before taking out a home mortgage loan

2011-11-08T03:21:00.001-08:00

When it comes to taking out a home mortgage loan, you have to take the best step forward so that you don’t end up in losing your home in the future.
A home loan is a secured loan; and you pledge your home as collateral. So, if you fail to repay the loan on time, it is most likely that you can lose your home to a forced repossession. If you can take out the loan after assessing your loan affordability, you can tend to take a better decision and avoid incurring secured loan debt. Are you aware of the points to take into account before taking out a home mortgage loan? If answered no, read on.

Your credit score: The most important document that is checked by the lender before lending you a loan is the credit report or the credit score. Your credit score depicts the kind of financial person you are. If you have a good score, this proves that you were good at managing your finances and with a bad credit score, it is most likely that the lender will charge you high interest rates to reduce their risk. Boost your credit score so that you can grab the lowest rate.

Your monthly income: The monthly income that you earn in a month is also an important document for the lender as he determines whether or not you’ll be able to manage all your debt obligations including the monthly mortgage payments with the income that you earn. If the amount is low enough, you may be charged high rates on the mortgage loan or he may not give you a loan amount that you ask for.

Your DTI ratio: Apart from the credit score, another vital number taken into account by the lenders is your DTI ratio or the debt-to-income ratio. This is nothing but the amount of debt that you owe on your credit cards, auto loans, student loans and mortgage loan in ratio with your monthly income. With a high DTI ratio, you’ll be charged high rates and with a lower ratio, you’ll not e charged a high rate.

Therefore, when you’re in the market to take out any kind of loan, make sure you determine your loan affordability so that you don’t take out a loan that is beyond your means. Manage your personal finances effectively so that you can repay the loan on time and thereby forestall the chances of losing your home to a foreclosure.

Things To Consider Before Taking Out a Secured Home Loan

2011-11-06T22:18:00.001-08:00

Are you in search of a loan so that you can solve some your immediate financial needs? If so, you can make use of your home to avail a secured home loan. Still anxious because you have a history of bad credit? Never mind as these days many lenders offer a secured home loan of up to 85% of your home’ present market value and for up to 35 years.

Now, that sounds cheerful, right? Well, what if the lender asks you to sell your home in order to recover his money?

A secured home loan means that the loans is secured against your home. Therefore, you assume all the risk and there is hardly any risk for the lender. Even, if you stop paying toward your debt for a significant period, the lender won’t compel you as he knows that he can have the money back by selling your house. However, if you stop making your payments and file for bankruptcy, it’ll be not an ideal situation for the lender.

Ask yourself the following three questions before you take out a secured loan.

Is there any other loan option available to you? If you have a good credit history, you can certainly shop around for more affordable loan options rather than just accepting the very first one. You might not know but the slightest difference in interest rates could save you thousands of dollars.

What the market scenario reveals, many lenders now offer variable interest rates to mortgage loan seekers. If you avail a loan with such an interest rate, the rate of interest can increase at any time in future and so your monthly payments. This undoubtedly makes it difficult for you to adjust your monthly mortgage payments keeping your family budget in mind.

Now what if you face a financial emergency in future? Do you have a supplementary plan to pay off your debt than just losing your house? First, determine for what purpose you are taking the loan. Are you going to use it to purchase the latest car? Are you planning a vacation using that loan? Or, just for your kid’ education? Decide if the purpose is worthy enough to keep your shelter at stake.

You might not know, but unsecured cash loans are a great alternative to secured home loan. This is because here you don’t run the risk of losing your property. Therefore, it’s always a good idea to wisely decide what you need before securing a secured loan. Further, if that need is worthy enough to risk your house.

Get rid of your unsecured loans – Take out a secured loan

2011-11-01T23:33:00.000-07:00

Most people have a habit of buying things in credit using their credit card. If you are one of them, then it is likely that you have a mounting amount of credit card debt to your name. Credit card debts are unsecured debts which usually have a high interest rate.
When you have debts with high interest rate then it becomes more difficult to pay them off as most of your money is gone in making the payments on the interest rate and the principal amount remains as it is or reducing just slightly. In such cases it is advisable that you take out a secured personal loan to pay off your unsecured loans. Read on to know ideas about personal loans.

What are secured loans?

Secured loans are loans that are secured against any collateral. Most often your house is such collateral. You can take out a second mortgage by keeping your house as collateral. The best part of unsecured loans is that they have a low interest rate. This is because, since the lender has a guarantee that he will get back something in return if you default on the loan, in the case of second mortgage your house, hence they charge lower amount of interest.

Why take a second mortgage?

A second mortgage loan, also known as home equity loan (HEL) keeps your house as a guarantee and allows you to take out a loan. This loan is given to you at a lower rate of interest as compared to secured loans. You also are entitled to get tax benefits on these secured loans which is not available to you in case of unsecured loans. However, a word of caution needs to be given here. Don’t take out a second mortgage unless it is really important for you to do so. Even when you have taken out a HEL, see to it that you are able to pay back the loan as fast as possible. This is because if you default on the loan, your house will go into foreclosure.

Thus you can see secured loans are an excellent way to pay off unsecured loans although these should be paid back as soon as possible.

Getting a construction loan - Steps to make before making your dream house

2011-08-29T23:44:00.000-07:00

With the advancement of technology on today’s world, it is possible to take out a construction loan from the best banks and financial institutions after signing your documents with your local company or escrow office. However, you must be aware of the fact that not all construction loans are created in the same manner as each loan has different kinds of terms and conditions. Just like any other product, there are good loans and bad loans and there are also loans that suit your affordability too. You must make sure that you consult your home builder and take out the best construction loan in the market so that you make the best use of your money. Here are some steps that you can take in order to get a construction loan.

1. Know all your options before choosing one: Before you settle on a particular loan, make sure you know all your options so that you do not repent later on. The construction loans that are available nowadays vary from 30 year fixed term loan to 15 year, 1 year ARM, 7/1 ARM, 5/1 ARM, 3/1 ARM and also interest-only loans. You have to pay a set of closing costs, and loan origination fees so as to complete the process of getting the loan.

2. Get pre-qualified for the loan: When you get pre-qualified for the loan, you can easily determine whether the requested loan amount is within your current budget and affordability. You can also get to know the monthly mortgage payments that you have to pay when you repay the loan throughout the amortization period. While you take out a construction loan, you need to tell your lender about the entire story regarding the reason and what you want to do after you construct the property.

3. Shop around for the loan: You must shop around for the construction loan so that you get the loan with the best interest rate in the market and that which is within your affordability. Get quotes from at least 5-6 mortgage lenders and choose the one that suits your affordability and needs.

Thus, when you take out a construction loan, consult with your home builder so that you know what you need and what you don’t. Don’t waste your dollars while getting the loan as you must value your hard-earned dollars and store them for repayment purposes.

Is it wise to take out a home equity loan when I need immediate cash?

2011-08-12T01:08:00.000-07:00

Do you need immediate cash with which you want to renovate your home? If answered yes, you must be looking for a loan that can help you get instant access to cash. Other than personal unsecured loans, you can also get a home equity loan by tapping the equity in your home. You must be thinking how that is possible. Well, if you had taken out a home loan of a certain amount, it is most likely that you've been repaying the loan amount in monthly installments. The amount of money that you've already repaid is known as the home equity that you've accumulated and you can take a loan out of this amount after considering the home equity loan rates. What are the advantages of taking out such a loan? Read on to know about them.

1. Low interest rates: The interest rates on the home equity loan will be much lower than that of the unsecured loans as your home will be used as collateral. Since there is less risk for the lender, he will charge low rates on the loan and thus you can make repayments on this loan in small and affordable monthly payments.

2. Longer repayment term: The repayment term of the home equity loan will be much longer than the unsecured loans as the amount that you take out is usually huge. Since the repayment term is longer, you can repay the loan in small and affordable monthly payments.

3. Tax benefits: The interest rate that you pay on the home equity loans will be tax-deductible and you can thereby save a lump sum amount of money every month. This debt is known as good debt and hence you may qualify for such money-saving tax benefits.

4. Proceeds can be used for any purpose: The proceeds of the home equity loan can be used for any purpose like home improvement, debt consolidation and also paying your son's college fees. Just make sure that you combine your unsecured debts only after considering your repayment ability.

When you take out a home equity loan, you have to stay sure about the home equity loan rates so that the lender charges you with the actual rate that is prevalent in the market. Manage your personal finances and make timely repayments on the loan to save your house from a foreclosure.

Explaining FNB Home Loans

2011-06-23T07:03:00.000-07:00

When we come to explaining the FNB home loans it includes a few simple steps and some home loan options. Traditional home loans, the Building loans and their home loans optional add on features, and custom made keys are some of the basic FNB home loans options. The traditional home loans which is a flexible loan which can be modified with a host of add on varieties of ways to serve your personal needs is the base that provides the finance for buying a home.

For structuring a traditional home loan of FNB home loans, a person needs to have a minimum earning of 10,000 and if wishing to purchase a property it should be worth a minimum of 300,000. The term of the loan can go up to 30 years and the options for interest rates include variable, fixed and BA- linked. FNB home loans offers finance up to 100% of the property value. The options of Future use and Flexi Bond, grant a person to modify this loan to suite its needs so that the person can draw cash against the loan and still be in control of its debt.

Those who wants to build their own dream home but they need a little support while getting started for them the classic Building loan of FNB home loan is the perfect solution. Once the home is built, the construction bond transforms to a standard mortgage. A person can get up to 100% of the building contract price which includes land also and gets up to a six headway payments with enough space so that the process of building will keep on running. This FNB home loan gives the option to the person so that loan term can be decided according to a person’s choice and can go up to 20 years and also the interest rate is narrow to variable rate until the building process is completed. Only thing to keep in mind is that construction should be done by the registered builder. The Flexi Bonds add on options provides the same elasticity as it gives the traditional home loan.

Well we had talked a lot about explaining the FNB home loans and we still don’t know anything about the history of this bank which is helping people to make their dream come true and modifying their lifestyle with time. History of foundation of FNB is quite interesting. In 1883 in the small university town of Ghrahmstown in the Eastern Cape the First National Bank also known as FNB and perhaps the father of South African Banking was established. One of the four largest banks in the South African Banking Industry, FNB has a long history of service of 140 years. FNB had become the completely owned and controlled South African entity and in 1968 turned from Barclays. Though some of the strategies of FNB were debatable still FNB managed to hold to its primary mission of helping the people and still after many years FNB is doing the same i.e. helping the people in meeting their dreams.

Defaulting on Home Loan Repayments and Correcting It

2011-03-25T07:31:00.000-07:00

Are you defaulting on a home loan and repayments? Is it the end of the world? Does defaulting on home loan repayments automatically mean foreclosure? Is this the start of the end of your most valuable dream and asset? How serious could this possibly be? How fast is fast when it comes to the reality that your bank can actually stake claim on your property? Before we can answer these questions, we must first be able to define what exactly does defaulting on home loan repayments mean, and what are the steps in correcting it.

Defaulting on home loan repayments - This is the act of negligence on the part of the borrower not being able to pay the agreed amount to the lender after a span of 15 days from the date of agreement. The date of agreement is usually on the first day of the month but in some instances it will also depend on the agreement between the borrower and the lender. Payments made after the date of agreement within the 15 day span normally would incur a certain amount of surcharge or penalty in favor of the lender. If payment is made by the borrower and penalties are settled within the 15 day period, this is not considered as defaulting on a home loan repayment, but simply a late payment and is not reported to the credit bureaus as late by the lender. Defaulting on home loan repayments is only considered when payment is not done within 30 days by the borrower and penalties and surcharges are not settled. If payment to the lender still isn’t made within the 30 day span, investigation from the side of the lender will be initiated.

Defaulting on home loan repayments and correcting it is the next step to be done after investigation is initiated. Once the investigation begins the bank would normally look into the borrowers financial capabilities. Before they get that far try your best to make amends with the bank. The best way of correcting this is by having open conversations with the different parties involved, by assuring them that you still have all intentions of paying. This would really help a lot instead of just trying to avoid these guys. If one tries to avoid his/her debts, sooner or later the good old collector will arrived. Believe me when I say that the collector never brings good news! Usually this ends up with the borrower in tears and a lot less assets than what he would normally have. Most banks are easier to talk to rather than trying to avoid them, they all catch up sooner or later. Most banks are even willing to help you by offering alternative ways of payments or differed installment plans ( a loan for your loan!). After defaulting on your home loan repayments for the third time, this is when foreclosure may be enforced. Once this is initiated there will be no turning back now, the bank may opt for publics auction of your property. This will mean the end for you my friend, and a new asset for our good old friend the bank!

Defaulting on home loan repayments and correcting it is the best action that one can possibly do. As a wise man said, “an ounce of prevention is always better than finding a ton of cure when the possibility of losing is evident!”

Things to Keep in Mind When Getting a Home Loan

2010-10-28T20:28:00.000-07:00

If you have recently made a new family of your own, it is a common tradition to live in a house that will serve as your nest for future generations of your blood. It is but only proper that at least you have a house to offer your new bride. It would be quite insulting if you still find yourself dependent in your parent’s support especially when it comes to shelter. Do not worry if you do not have the exact money to put up the house or buy one. It is understandable that nowadays, a regular man cannot work overnight and buy a house the next day. It will usually take many years before you can actually build up a house to buy a house outright.

All you need is a guaranteed home loan. To some this maybe the hardest decision that they will make in their lives because if not properly handled, it can be the cause of long term debts. People with families are not the only ones who can make use of home loans. Even those that are still single but longing to get the house of their dreams are not exempted. As long as they are ready for the obligations and responsibilities that lie ahead, then they can apply for one.

Getting a home loan is a tricky thing, especially if you are not familiar with the processes involved and even the term per se. To help you out with your plan, here are some helpful tips that can help you carry it out.

Always be cautious with the policies that are laid down in your table. You need to research in advance on what type is ideal for your needs and capacity. For example, you may find lenders that will offer you equity home loans to pay of consolidated debts. This is a good one but sometimes, it can also endanger your home. The best thing that you can do is shop around so you will have a lot of options so choose from.

You can ask your friends who have home loans themselves so that you will get ideas on how lenders are dealt with and most of all what company or lender can give you the best service. This is crucial because oftentimes, lenders are so much engrossed with their hope of getting more profits that they forget sincerity. A reliable lender can explain to your thoroughly the meaning of home loans. You can approach a broker if you think you need one. Brokers are those that will get a lender for you. They will usually make the closing costs higher.

Once you have already chosen your lender, read and review the application or loan papers thoroughly. You can use the help of you lawyer or house counselor to help you understand the terms that you are entering into. Ask necessary questions especially ones that involve fees. Don’t feel pressure. Put in mind that you are client and that the lender has no power over you. If you find the policy not admirable or pleasant, then you can certainly say no.

Discuss it over with your family or the people who will get involved in your decision. Know your legal rights too and the regulations that are put down by your state or your place. This way you will not be entangled with any illegal or embarrassing mistakes.

Advantages of a Home Loan

2010-10-20T12:20:00.000-07:00

If you are a family man, the only thing that enters in your mind when you go to work and before you go to bed is the future and good of your family. For parents, a good house is one of the best gifts they can give their children and generations to come. However, taking into consideration the various materials that are needed in building a house and not to mention their costly prices, it will take your years to come up with a considerable amount of money to build a house.

Thanks to innovative minds today, various plans and policies are now available if you want to have the house of your dreams without bearing the full amount of the house. A home loan is a common way of acquiring a house thru a loan. In this loan, the house that you have bought using the money that you have borrowed will serve as your collateral. The lender will temporarily have the right over the house until such time that you are able to pay the loan. Usually, a borrower will be given at 15 to 30 years of paying the obligation. When you fail to perform the obligations required, then that is the time that the bank forecloses the house that you are living. Often, it will be sold in an auction.

Paying for your home loan is a burden. But considering the benefits that it gives, it’s all worth it. A home loan above all, gives you the chance to enjoy the house and live on it long before you are able to pay fully for it. This is a good way to start a new family without having to resort to apartments and leased rooms. There is nothing more comfortable than living in a stable house with a good neighborhood.

Secondly, home loans give you ample time to pay the installments required from you. Because the terms are made up of years, you can make budget your salary in such a way that you can pay your obligation without compromising some leisure for your family. There are however others who prefer to have shorter terms. In such cases, they are high earners and they want to get rid of the burden as fast as they can. But if you know that you cannot afford a high monthly installment, you can choose a longer time.

Thirdly, you are allowed to use the loaned property to help you pay the loan per se. in some cases, loans will keep you indebted with no way out. In a home loan, there is an option to have a part of it leased or rented as long as you do not sell it of course. This is quite ideal for those who have small family members. They can temporarily have a room or space in their house rented until the house is completely owned by them.

Lastly, home loans offer joint applications. This means that you can find a partner to bear with you the cost of the loan. This proves sufficient for those applicants who only need little. It lessens the burden too very much.

A brief introduction on a mortgage

2010-08-23T05:44:00.000-07:00

A proposal to the girl that you have loved for years is one of the most important activities that you have to be prepared of. You cannot just walk n to your girl, hand her the ring and get the sweet “yes” as a reply. Most of all, you need to be aware that to be able to get the girl that you have wanted for all your life, you need to be sure that you can give her the best of what you can. One of the things to consider before committing to someone is your preparedness. For example, these days there is already a certain degree of need that before a marriage is entered into, a house is already waiting for the new family that both of you will make. Otherwise, it can be an embarrassing part in your side. A home is not only a bland structure but a colorful one where you can start a life of your own and produce your own joys share each other’s pain.

But today it is a reality that you cannot buy a house outright, except of course for those who are billionaires or someone like that. A house is not a commodity which you can put in your shopping cart and pay in the counter. You will have to suffer, toil and save for many years before you can actually build a house for your own. This is the reason why people who do not have the luxury of having enough money turn to renting as an alternative. They either rent a whole house, a room or a unit. But we know very well that renting is far different from living on your own house. A family that wants to bloom to the fullest pretty knows that fact. Yet, because a mentioned they cannot be bought outright, people explore other possibilities of getting their own homes without paying a large amount of money in bulk. One of the most appreciated options is thru a mortgage loan. In a mortgage loan, you will not only have a house of your own but also choose one of your own preference.

A homeloan is a type of loan where you borrow money in the form of the house. You will have to find a good lender for that matter who can give you a reasonable and honest deal. The amount of the house, plus the interest added by the lender will be divided in a fixed period. You will pay in installment basis until you will pay it all. As a guarantee that you will perform your obligations, you need to give the temporary authority of your house to your lender. But notwithstanding this set-up, you can already enjoy your house. You can develop it or even lease a part of it to help you pay for the monthly installments. But the catch is, if you cannot pay the installments promptly, you will be exposed to the different disadvantages like an additional interest. Worst, you can be kicked out of the house.

Before getting into a mortgage deal, you need to get and familiarize matters concerning the topic. You can actually do this by getting the suggestions of people whom you know can offer you advices. You can even browse for websites that offer simple yet effective ways of getting on a smart and legal deal.

How do Foreign Investors and Buyers Buy Real Estate in South Africa?

2010-08-10T04:01:00.000-07:00

The 2010 World Soccer Cup is beginning to wind down, and South Africa will be returning to normal after a long and exciting run by all the international teams. However, the real estate market is as hot as ever—especially by foreign speculators. If you’re a newcomer to the South African market, there are a few things you need to know, such as: methods, acquisitions, lending practices, African laws, etc.

Some of the red tape, if you will

Thanks to the Aliens Control Act / Section 96 (1991), international investors and buyers can buy and sell real estate in South Africa. There’s a bit of red tape, however—but when it comes to investing, there’s usually no way around it. Read on:

Foreigners who are in the country illegally cannot own any estate that isn’t physically movable.

This also makes it easier for non-natives to acquire properties and sell them
Immigration Acts for South Africa mandate—that if you live in your home in South Africa, and are not a naturalized citizen—that you have to acquire either a temporary permit for residence or a permanent permit to live in the country. Officials enforce this law pretty tightly as well.

Getting the funds into the country and securing them

Any capital sent to S Africa for the reason of acquiring real estate can be transferred through most nominated banks and lending institutions. Usually, the account in which it’ll be paid into will be a realtor’s trust account. Doing business this way is usually 100% safe and secure, as there are S. African Boards that dictate a strict code of honor among realtors. Just don’t be scammed by a person claiming to be a real estate agent or realtor.

South African banks also lend money to non-citizens

As a matter of fact, S. African banks and lending organizations loan just as much money to international investors as they do locals so it's quite easy to get a mortgage approved. There’s just one stipulation for foreign buyers: that is that only half of the funds borrowed from an in-country bank can be used; the remaining money has to originate from a bank where you live or from another country.

Also, you’ll need to show prove to the S. African bank that you have a steady stream of income, and there’s a good possibility your credit and references will be verified as well. As long as South African laws and regulations are met, then you are then free to conduct business in this great country.

The tax man; he’s everywhere

Is he really? Most newbie foreign investors are curious about that in S. Africa; they want to know if any of their earnings are taxable as income. Of course, yes, you have to. On any property earnings you make on any South African estate, you’re responsible for paying the country’s income tax. For example: you rent out a small dwelling in Johannesburg and you intend to reap the payments. A cartage percentage has to be paid in taxes.

Alas, there are many more items that you have to contend with when investing in S. African real estate. Some of them are like the nuisance of paying income tax, and some work more to your advantage. With the laws and regulations in a state of continual change, you have to play the game by the rules—and how can you play the game without knowing the rules? South Africa, though, has an extremely lucrative real estate market; there are countless investors and residents that have made very handsome returns. Could you?

How the Interest on a Home Loan is calculated

2010-08-02T01:59:00.000-07:00

Many people dread the red tape and long drawn process of buying a house. There are many details that you need to know before hand, and it is not a simple case of just handing over the money and moving in. Obtaining a property loan is perhaps the most important on the list of things to do. A Property loan is essential as not many people can afford to hand over cash for a property in one go. A property loan allows monthly payments.

Part of the responsibility of having a property loan is to pay the interest rates and that is when it starts getting difficult. You can not just take the current interest, add this amount to the total of the loan and then divide by the number of months the loan is for. It does not work like that.

There are different methods used to calculate interest rates.

Interest laws will vary from country to country, after that banks and financial lenders will use their own methods to determine the interest to pay. Methods will differ according to what loan has been taken out. Factors that banks and financial lenders take into account are
- The current interest rate
- The time period of a loan
- What kind of interest terms and conditions are attached to that loan.

How is interest on a home loan calculated?

Interest is paid on a property loan and this is calculated daily, and then totaled up at the end of the month. The interest rate that is used to calculate the repayment term will be an expected rate for a year. The amount left to pay is another determining factor that will establish the monthly repayments.

An example…

A property loan is R400 000.

The current interest rate is 13.5% per year.

In the month of March, there is 31 days.

The interest is calculated like this:

13.5/100 X R400 000 X 31/365 = R4586.30

It is important however to remember that with each payment, the amount owed will decrease therefore the above calculation will be different.

Imagine that you will pay 5000 rands, the new calculation will be as follows.

13.5/100 X R395 000 X 7/365 = R1022.67

This makes the total interest payable for that month R4573.35. Monthly payments have then been reduced by 13 rand.

Reduce the amount of interest you pay.

It is easy to see from the examples above that the sooner you pay a property loan, the less amount of interest you will pay. Remember as well that interest rates always change and with every year, you can find your repayment amounts going up or down. As this is not a certain amount, this is another valid reason to pay the property loan as quickly as you can.

The Various FNB Mortgages

2010-07-29T04:44:00.000-07:00

There have been a lot of changes in the South African housing market over the last decade. From the boom that began in 1998 to the height of South African homeownership in 2003 – at seventy-three percent – the market now gives every indication that it has reached a plateau. The government has responded by enacting policies designed to heighten the demand for and availability of housing to consumers at every end of the income spectrum, in an attempt to increase the number of South African homeowners.

South Africa’s First National Bank – more commonly referred to as FNB – now offers a range of options when it comes to FNB home loans, with an eye toward making them available to everyone. FNB will assist you and offer their expertise to ensure that your home buying experience is as simple as possible. Here are some of the various mortgage options that may be perfect for you.

The Traditional

Used only for the purpose of buying houses the owner intends to occupy, the Traditional home loan involves obtaining a loan from a bank. Only individuals and couples need apply, though private companies, close corporations, and various trusts are also allowed to obtain these loans. There is a monthly earning requirement of R15K and certain credit restrictions as well.

The Foreign Choice

There are even options for expatriated South Africans and foreigners who have decided to purchase homes in the country. There is the requirement that you pay half of the property value upfront, however, since the financing entity will only provide funds for half the loan value.

The Smart Bond

For low income South African home buyers, approved applications for a Smart Bond help the borrower avoid the deposit and obtain complete financing for the purchase. This is one of those loan options designed to make homes as affordable as possible so that as many people as possible can obtain their own house. With Smart Bond, you can receive assistance in getting your home loan, developing a personal portfolio of investments, and finally live the life you have always wanted.

Financing for Islam

To meet the particular needs of Shari’ah law – the Islamic code of conduct that forbids interest, among other things - FB has developed the Islamic Finance option. This type of loan, administered by the FNB, involves the use of a certain contract type. The contract itself acts as a mortgage agent and uses fixed rates to buy a house for you. This enables you to avoid direct involvement in any interest-charging loan since you pay through the agency agreement rather than submitting directly to an interest loan.

The best part of this loan option is that everything is set in stone for the duration of the mortgage. That enables you to avoid rising interest costs. The major disadvantages involve the fact that you cannot obtain additional financing, building loans, or readvances, since these are all inconsistent with Islamic legal requirements.

Obviously, the tremendous numbers of loan types offered by the FNB ensure that almost anyone can find a home loan fitting their individual needs. Once you do, you can then determine your budget ability, find the right home, and get started on your loan application.

Standard Bank Real Estate Loans

2010-07-28T01:28:00.000-07:00

One of the South African government’s most important promises to its people has involved making homes affordable and available to as large a segment of the population as humanly possible. So important is this vision that is enshrined within the country’s Constitution, guaranteeing that every single citizen of the nation has a right to obtain housing that is adequate to their needs. As a result, South Africa’s Standard Bank has developed many types of loans to guarantee that there are options available to every South African who wants a home.

With Standard Bank’s firm belief that the best memories always center on home and hearth, they have set out to ensure that the loan types they offer bring all of those memories within the grasp of every South African family.

The different Standard bank home loans:

The DreamStart

Most people give little thought to getting a home when they first join the world of work. Instead, they generally rent and save for the future before considering a home purchase. DreamStart, however, is a loan option designed to make it easier for even the newest members of the workforce to obtain home financing. That’s an attractive option for any young person wanting to get that first home early and perhaps move on to purchasing investment properties as they get a little older. For would be borrowers earning a monthly wage of anywhere from R1500 to R6K, the DreamStart is perfect.

Ordinary in name only

Standard bank’s ordinary loan offers assistance to most would be borrowers. Once the borrower takes care of all of the registration and deposit fees, he or she is eligible to receive financing that can be as high as ninety-five percent of the value of the loan. They do, however, require that you have a checking account with the bank.

Standard bank’s various term options provide access to housing loans for you regardless of whether you are selling the house you now own, purchasing a new house, constructing one from scratch, or doing renovations. The terms are adaptable to meet your needs, and designed to be within your budget ability. There are also a variety of tools available that can help you calculate your financial capacity and guide you through the process of home purchase. Every one of these tools is designed to assist you in expediting a housing purchase.

The first thing to do is to determine your ability to pay by using the calculators provided by Standard. With that number in hand, go out and find the home in your price range. The Standard lists for buying and selling offer practical guidelines for finding the home you need. After all of that is done, you have only to make a purchasing offer and fill out the paperwork for a Standard loan. Once approved, the home of your dreams will be yours at last!

The Nedbank Mortgage Types

2010-07-27T00:45:00.000-07:00

The end of apartheid brought about an unprecedented level of political stability within South Africa’s governmental structure. These changes have helped the world’s trust in the South African government to continue to rise, leading to a host of new investment in the nation. Most important has been the impact on both of the main home markets, for both mainstream and lower wage earning borrowers. For all categories of borrowers the average interest rates have been reduced by more than twelve points.

As part of its ongoing effort to increase the size of the market and is activity, Nedbank continues t create new options to make homes more accessible to the general public. Those people’s needs for a new home are diverse, with some looking for their first house, others wanting to invest, and still others simply moving to a larger home to accommodate growing families. Regardless of the reasons for the loan, Nedbank has the tools to help you achieve your goals.

Building loans for construction

Let’s say you don’t want to purchase a home that is currently standing, but would prefer to build your own. Nedbank’s solution is the building loan, which is easy to obtain if you have at least R2500 of monthly earnings and a positive credit rating. In addition, the NHBRC has to approve the building plans, which must involve construction of a home worth at least R150K. If you can meet the repayment test and are in compliance with the National Credit Act’s terms, you will be well on your way to receiving your loan.

The option of Buy to Let

For some South Africans, home purchases are sometimes used as an investment vehicle. We’re talking here about people who own their own home and simply want to buy another property t rent out to others as a means to earn money. If you have monthly revenue of R30K and an unblemished credit record, you need only to prove your ability to meet payments on a home that is at least R150K in value.

The HomeVision option

This is one of those special loan types that enable you to use any increase in value on your property to register higher Nedbank home loans than the loan requires. The resulting excess of funds can be used by you for other purposes in the future. If your income exceeds a monthly R2500, and you can demonstrate an ability to meet payments on a home worth at least R100K, then you may be able to utilize this option.

The Ordinary option

Nedbank also offers the more ordinary type of housing loan, adjusted to meet your circumstances. These loans are useful for development properties and residences alike, and fairly easy to qualify for. Monthly income of R2500 is required, as are the standard credit ratings. In addition, the home’s value must be at least R100K, and within your means as judged by the terms of the National Credit Act.

Nedbank’s loans are all capable of being set for 30 year terms, whether you are buying, investing, renovating, or constructing. In addition, both flexible and set rates of interest are available. Thanks to banks like Nedbank, you are closer than ever before to being able to purchase your own home.

Nedbank Mortgages

2010-07-26T04:02:00.000-07:00

In South Africa, the Nedbank company is one of the largest banks. Its headquarters are in Johannesburg, and is one of the newest member thats has been incorporated in the bank world. This banks offers its customers a variety of commercial and personal financial services within South Africa and various parts of Africa. There are many convenient locations of where the banks are placed in South Africa.

A Summary:

Nedbank offers home loans as part of its services. The home loans that are provided allow their future clients, to purchase a first or second home, a vacation home, an investment property or have home renovations. This home loan from Nedbank allows the client to negotiate a payment plan that can last up to 30 years, at a variable of fixed rate. They will be able to allow the client to obtain a 108% home loan for a first time home buyer, and give you options that will suit your financial requirements.

Your payments monthly will include the following: interest and capital, life insurance premium (if you can apply for one), homeowners insurance premium and the administrative costs. This allows the customers to pay their loan off a lot sooner than what the agreed length of time was. You can have your payments fixed on an amount, have your monthly payment increased by an annual percentage or by choosing the length of time in which you pay off your mortgage.

Who qualifies for the loan:

An applicant that has bad credit won’t be able to apply for Nedbank home loans. If they aren’t able to manage their bank accounts, have bad history of payments for bonds, behind schedule in utility or tax payments or you already had some property, furniture or vehicles repossessed because you weren’t able to pay. If you are wanting to buy a house and you need a home loan, and you happen to be in those categories, fix your credit rating and financial situation before you apply for an application.

Information for Application:

You need to fill out a qualifying application. The information you need to provide them with is a, credit check, financial status, employment history, your debt and debt repayments capability and your payment history, will be need to be provided to see if you qualify. The applicants needs to provide them with some documents as well, such as, your previous salary receipt or a financial statement (if you are self employed), marriage certificate if you are applying as a married couple, identification, you last 6 months worth of bank statements, if you have a bond, you need to provide a statement or a title deed if you don’t have a bond.

Financial Implications:

What you borrow is based on what you earn. Your monthly payments shouldn’t be more than 30% of you income. This will be decided in the process of approval. Allow 8% to 10% of the purchase fees, which can include, your down payment, conveyance fees, transfer duties, bank charges, utility costs, homeowners, bond fees, moving costs and taxes.

Before your loan can be approved, majority of banks, will ask the applicant to have a home owner’s policy put in place, unless it already comes with the deal. The bank can recommend what insurance agent they have for the policy, but the applicant should have a look around for the best rate for them. The bank may need the applicant to have a life insurance policy put in place, if they don’t already have one. This will help the family of the applicant in case they were to pass away and the loan can not be payed.

Getting a home loan if you are ITC listed

2010-07-23T04:46:00.000-07:00

What did we ever do without the internet? It’s become an indispensable tool for millions—for thousands of different reasons and facets. Within the vast abyss of the internet lies a seemingly-endless amount of knowledge; knowledge that you can use to your advantage and further your life and your dreams.

The same goes for the real estate market. Gone are the days where you had to browse the classified ads or run around with a realtor. You can even practically buy a house online—well, not quiet, but it’s getting there. Next time you browse the net for mortgage packages, take a look at the ITC listings.

Are you an actual client that’s been blacklisted?

Being blacklisted can be like having a big label attached to your forehead that reads “DANGER” to banks and other lending institutions. Yes, it’s true that many banks will frown upon this “label” and many more will even flat-out dismiss you as soon as you utter their name.

However, there are known-successes with blacklisted individuals who found homeloans through ITC listings. This is a documented fact; so just when you think nobody will be sympathetic to your cause, there is always that one organization out there which will lend you their ears and consider your troubles.

Banks are all-too eager to list in the ITC section

Traditional banking institutions want a piece of the ITC market as well. This fact is undeniable—they’re eager to jump on the listings because of the immense popularity of them. They also know that because ITC’s usually allow them to offer mortgages and APR’s at ridiculously low rates.

Do a quick Google search for ITC listings; you’ll probably be amazed at the opportunities there are in the ITC market. Just as the old adage goes “one man’s garbage Is another’s treasure”, you shouldn’t pass these up.

Banks are not the only entities that love ITC listings

There are many individuals—who happen to be wealthy or have higher-up connections—that surf the ITC listings as well. Most of them see the potential for big profits in ITC-related mortgages, and they want to capitalize on that—and not necessarily in a bad or greedy way. Their gain can very well mean that you get a really attractive loan term, as well as things like APR’s; closing costs; taxes and many more variables.

This is where the phrase “caveat emptor” needs to be strongly urged. If you have been on the web for any length of time, you probably know that scammers are constantly on the prowl—always looking for the next sucker to extort money out of. Don’t be a victim. Look for any signs that they could be trying to take advantage of you, and never—ever—give them money when they insist you have to send “upfront money” or send money to some other country for “processing” or something to that effect. Know your lender, do your research on it (whether it be a finance corporation or an individual), find reviews on the organization online (if you’re dealing with a company and not an individual, that is), and be very wise with your hard-earned money.

Saving On Your Home Loan

2010-07-21T06:22:00.000-07:00

If you a homeowner and are looking for ways to save on your bond, there are many different ways in which you can do that and accomplish your goal, at the same time. Although the rates are a lot lower than the 20 percent scope that evaded the country a few years back, the rise in interest rates in past several months only demonstrates how important it is for people in South Africa to take the advantage on any information in reducing the cost of your home loan. By maintaining your bond account, and taking charge in how you use your money, you maybe able to reduce the bond time by as much as a third of the total overall payment period, which can save you almost half of the total loan amount.

Try to pay more when you can

Many buyers don’t realize that you can save money on your bond, by paying more every month when you can. If you are able to pay R200 each month, you can easily reduce your amount on the mortgage, as well as how long it will take you to pay it. A lot of people make the mistake that if you negotiate a lower payment in times where the rates will be lower will be better for them, but you should however, maintain the same payment level always. By doing this, when the interest rate is low, will decrease the opportunity in making serious deductions on their bond, and be a negative towards saving on your bond.

When the interest rate decrease, you should keep to the current budget at hand, and it will help you to take the advantage in knowing that their is extra money being deposited to your bond account. It will also help by, having a tax free interest and lowering your loan amount as well.

Using the Internet

By having access to the Internet, can help you maintain any excess cash you may have, and could reduce the bond amount and save you money at the same time. Having the Internet banking at your disposal can be powerful as many homeowners have discovered, as you can utilize the many features that is available to you. With Internet banking you can move your money around easier, and keep it there for a short length of time and move it back when you need to. While the money is in your bond account, the money will work to minimize the total that is owed. There are some banks that charge a fee for dealing with the money, so check the details before using this process. If your transactions don’t have a fee charge, then simple keep the money in your bond account, and move it back to your online account when you need it.

Is Liquidity essential

Having a liquidity in your cash is important, no matter how you are saving money on your bond. With your home loan provided negotiate the ways in which you can move your money around and into your bond account, make extra payments when you can, and if you can have access to the stored money. Most banks will be happy to have your capital with their bank accounts, so there wouldn’t be much of struggle in negotiating the terms and what you can do with your bond account.