Thursday, 9 June 2011

So how to I get a bond and get an interest rate?

The but bottom line for the banks granting a bond to you

you need to provide

1. all the required and correct documentation – if any deviation unless there is an awesome reason they will not proceed.

2. Your credit record needs to be clean else they will

a. Either decline

b. Offer you less

c. Load your interest rate

3. You need to meet each individual banks criteria – which they change regularly or as the market forces move along and we are briefed on these as these changes happen

4. The same criteria is in place whether you go direct to the bank, have a private banker, use an originator, have been with the bank for 20 years or 1 month.

Interest rates

1. There is presently no rate war between the banks as the rates are at their lowest in 30 years

2. Even if there was no one would admit it – but we pick up the trends as we service all banks

3. Rates are affected by:

a. Amount of deposit – the more the better

b. Clients credit rating, externally at the bureaus and internally at the bank – clean = better

c. How long you been employed

d. Type of employment

e. Self employed versus employed

f. Type of loan – vacant land versus home (vacant land carries a penalty at present), holiday home, commercial etc

g. Age and marital status

h. Bank client who deposits salary at the bank or non-client

i. Paying by debit order versus salary deduction

j. Offering surety such as cash based policy

k. Insurance on your life on the bond

l. Whether you pay more than your bond monthly repayment requirement or not – early payer

m. And other factors which the banks have built in their scoring systems

4. All rates are determined by the banks scoring mechanisms and systems which they have spent R millions on to give them an accurate assessment and hence a score


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