Understanding Mortgage Origination

Private Property South Africa
Press

Banks have differing criteria and product ranges for specific market segments. Logically the first-time home buyer has a vastly-altered profile to the multi-millionaire private bank client seeking out his status-symbol property. Property is the largest single investment most people undertake and not a decision made more than a handful of times in life. It is therefore a daunting, unnerving experience that, without professional assistance, can cause sleepless nights and cold sweats. Bond originators work closely with the banks to understand the precise parameters required by the financial institutions, placing them in the position to advise clients on how to accurately present the deal. The essence of mortgage originators is that they can offer clients appropriate advice and choice. Typically bond origination provides the public with assistance through relatively unchartered territory, while lowering bond costs and stimulating inter-bank competition. Around 60% of South African bond approvals have followed the origination route against an estimated 30% flow in Australia and Canada, reflecting the vital link mortgage origination plays in the home ownership chain. Mortgage originators have agreements with the four major banks, several of the smaller institutions, private banks and other non-bank lenders. This means those clients fortunate enough to qualify for a loan from more than one institution has the enviable choice of accepting the one offering the best rate and terms. Bond origination capitalises on the short window of opportunity buyers have in which to secure finance and confirm their purchase. The industry provides unbiased and extensive product knowledge that caters for each client’s specific needs, thus boosting their chances for a successful application while recognising that securing the bond and determining the associated costs is pivotal to the decision-making process. Banks want to reduce the amount of time wasted on unfeasible loan applications and that is the value bond originators offer to both the financial institutions and the man-in-the-street – having the expertise to weed out those applications that should never be placed before the banks. As home loan specialists offering clients a free service, consumers secure from mortgage originators the best chance of getting a home loan on the best terms with the advantage of one-stop shopping and the convenience of choice. Established a decade ago in South Africa, bond origination has matured significantly as a professional lifeline for potential home owners and estate agents. Bond origination is the process of matching mortgages that suit specific individual needs. The key lies in giving clients a choice of banks and thus providing a hassle-free service without incurring additional costs.

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