Monday, 2 March 2009

Bond Originators Are Worth IT & They're Here To Stay!

Let me tell you, when I read this headline in the Sunday Times news paper yesterday evening, my knees went wobbly and I finally realised that there are people in this world that know what they're talking about.

Well done Saul Geffen, you are the man, and I do share your sentiment.

Bond Originators are here to stay, whether the banks wants us or not!

The fact is - the banks needs us, clients need us and if bond originators in South Africa and worldwide for that matter can just learn to bring good quality bonds and leads through to the banks we can and will assist them in making the home loans division of the banks a profitable, steady and reliable source of income that no other department or division will ever be able to make them...

So all you bond originators, keep the bonds tidy, keep them clean and be honest with your clients upfront, and not only will we keep our contracts with the banks, but we'll make it so worth their while that they'll be throwing those parties for us in the Carribean, because we actually pulled them through this recession.

Just to highlight the interview with Saul Geffen from Ooba in the Sunday Times:

How do I negotiate better interest rates from my bank?
Do I need a bond originator/should I go to my bank?

1. The size of your bond and deposit definitely affect your rate concession. Banks require buyers to have a deposit of between 5% and 30% of purchase price.
2. The banks check the credit history of yourself and your spouse/co-applicant/surety and if not conducted correctly, could have an adverse effect on your application.
3. If you are divorced or separated, make sure you are not linked to any debt or open credit facility with your ex.
4. Cancel old credit cards as this will make lenders wary about the potential size of your total debt – if you don’t need the full credit limit offered on a card, have it reduced and the same applies to retail credit.
5. If you are a first time buyer, consider taking out a credit card 6 months prior to making a bond application. You will need to pay your balance in full on time each month to show your diligence in managing your debt.
6. Your salary/income needs to be deposited into a bank account as the banks will ask for proof of income via your bank statements, accuracy is paramount.
7. If you have credit problems, always keep proof of payment and outstanding debts have to be removed from your file.
8. Pre-qualifications should be done so that you can be in a stronger position to negotiate with the seller.

Do I need a bond originator/should I go to my bank?

Origination makes even more sense in the global credit crisis as banks have tightened lending criteria and are not under pressure to offer interest rates below the prime rate for their mortgages.

Bond originators act as negotiators on consumers’ behalf. For every 0.5% concession to prime, the saving on R1-million home loan represents a saving of R86 750 over the life of the standard 20 year bond.

The benefit of having one’s home loan application assessed by several banks is that it gives the consumer the best chance of a better deal.

The originators service is at no cost to buyers and there is no obligation to accept a particular loan.

Originators also guide buyers through the voluminous paperwork required by the National Credit Act.

Are banks cutting out originators?

Some banks are looking to reduce commissions to originators, given the impact of the higher cost of funding and bad debts on bank margins.

But, origination remains the key distribution channel for home loans and banks recognize the strength of origination as a distribution mechanism.
WizardMan Out - Good Night All!


Anonymous said...

Yes even here in the United Arab Emirates we Mortgage consultants (Bond orginators) feel the same sentiment, we are here to stay and make choices available for those who work hard for their money and know that we can give them choices, choices and more choices

Well done you guys!
Independent Finance in Dubai and Abu Dhabi

yes2property said...

I think they do a great job. Keep it up guys.

WizardMan said...

yeah, and i love seeing all this feedback it's great.

M said...

Great Info, thanks

philippine real estate said...

thanks for this very factual information...they really know what they're saying...

- ledz -

ProOriginator said...

Although not all bond originators will deliver the same level of service, their level of specialisation means that you get dedicated expertise and resources, rather than having to get hold of the right person or resource within a big financial institution issuing the bond.

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