Wanna be an Originator Apply here!

As this has often been a fairly open and new industry the regulations are very much self imposed and we have had bodies such as NAMO try regulate the industry but they have not succeeded.


So as business owners we have searched for the best of breed and this is the way i see it:

1. You need to be a 100% peoples person – as people will only do business with you if they trust you and like you.  So APPLY TODAY

2. You need to be extremely confidential – and this must be legally set out and signed before your start as a consultant or originator.

3. The educational aspect most times means

     a. Financial experience – accounting, auditing
     b. Understanding income and expenditure
c. Understanding credit risk management, scoring systems, high and low risk
d. Understanding affordability for now and future as rates rise and change and impact on the client
e. Doing due diligence on a client and understanding 100% their involvement, business, employment and exposure
f. Understanding how to read:
    i. A balance sheet
     ii. Assets and liabilities
     ii. Bank statements

g. Understand how to look for fraudulent activities with employer, employee, business and banking

4. Legally a detailed employment contract together with multiple clauses covering the lenders, the originators and the clients is signed.

5. Skills looked for:

a. Banking experience

b. Any finance experience

c. Credit risk management experience

d. Property type experience

6. Lastly, the banking rules change often, so training is needed all the time and you need to be updated and accurate

One of the key things is to declare the truth to the banks as we abide by the banking code of conduct.

So

The originator warrants that this application and supporting documentation is submitted by the originator on behalf of the applicant/s with the applicant/s knowledge and consent. The originator warrants that the applicant/s have chosen the mortgage originator’s address for delivery of the quotation to the applicant/s. If signed on the applicant/s behalf, the originator warrants that is has been duly authorised by the applicant/s for this purpose. The originator further warrants, to the best of its knowledge, that the documentation / information submitted by the applicant/s in support of this application is not fraudulent, incorrect or misleading.


So this is a serious business..

NEDBANK - A GREAT Balancing Act - to get a Home Loan!!!!

Well I am impressed when I hear a  credit manager tell me what is needed to get a home loan - open policy - nice to see Nedbank .

Three pillars of strength needed folks - thats all so YOU WANT A HOME LOAN then -

RISK - You need to make the bank feel that all the risk is not only on their shoulders but also on yours.  So what do you need for this - A deposit reduces the banks risk and adds yours into the pot, so start saving.  Be a smart finance manager, so manage your accounts and VERY VERY important PAY YOUR ACCOUNTS ON TIME or in ADVANCE.  Never pay late.  Nedbank, like most banks have an internally risk rating of you as a client, so contact your Mortgage Broker and get your risk rating in advance, THEN apply for a mortgage only.

SECURITY - Well no one wants to be left hanging and neither do the banks and this is not particular for Nedbank only.  So make sure what you buy is acceptable for the banks to finance.  If a sectional title flat or apartment get the body corporate financials and make sure the body corporate is in the black (positive cash flow), not to many arrears and outstanding levies, and up to date paid insurance.  Then the bank will feel comfortable as well.  If you have just started a job, make sure you supply your job contract together with a payslip.  Its all about feeling secure. 

Ask your broker.

AFFORDABILITY  - If you want to be declined then dont justify what you can afford.  Remember 30% of your income is the MAXIMUM that the banks will allow you to spend on your home loan.  THATS IT!

DO NOT INFLATE YOUR SALARY AND INCOME! OR DEFLATE YOUR EXPENSES! If it is unrealistic the banks will automatically add an additional 25% to your expenses and once declined on affordability it is very difficult to convince credit managers otherwise.  IT IS TO PROTECT YOU afterall!!!!!!  Ask your mortgage advisor to assist you before you have a bash yourself.

Lovely, easy and A GREAT BALANCING ACT!

I WANNA BE A PROPERTY BARON!!!!!!

I WANT TO GET INTO THE PROPERTY BUSINESS ON A PERSONAL LEVEL - I'M JUST NOT SURE WHERE TO START!!!!!!

Thanks for the frank and open emails I have received lately and just to touch base here are some of the real deal answers.

Yes, it gets quite daunting as everyone seems to worry more about themselves first and only then consider any form of straight and open answers to where to go and how to get involved. There are no 100% fixed rules except for death and taxes, but these are the guidelines we use and have done so successfully.

I, and my whole family, Wife, son, sisters in law, brothers in law etc are in the property business and not only do we do financing (Mortgages) but we do a lot of what you want to do. We buy, invest, build, sell etc as this is a great business to be in and the risk lies with you 100%.

Firstly let me answer some simple questions examples are R 20,000 income (Gross) and R 500,000 purchase price.

1. You can buy as many properties as you want. The key is can you afford them. Most folks think that by buying a property for e.g. R 500,000 and having a bond for R 5500 per month and renting it out for R 5000 per month automatically means you can qualify for another R 500,000 house.

The basic rule (An there are always variances between banks) is that Your income of R 20,000 allows you to spend about 30% thereof on a home loan so you can afford R 20,000*30% = R 6,000 per month.

When you have additional rental income the average the banks take into account is 60-70%(Lets say 65%) of this. So if you are renting for R 5000 per month you can add R 5000*65%=R3250 to your R 20,000 salary = R 23250 * 30% = R 6975 - That's what you have to pay bonds from a qualifying perspective.

In truth if you have a good surplus of money left after your normal expenses food etc this will assist the credit manager at the bank in giving you slightly more.

With the interest rate where it is now (Even when the bank give you a better rate (Concession) you can work on about spending R 1,100.00 per month on every R 100,000 borrowed from the bank.

2. So you can own as many properties as you can afford ON YOUR OWN, WITH A SPOUSE, WITH FRIENDS, IN A CC, TRUST or COMPANY

3. Maximum people in a mortgage/ownership go crazy but in a legal business a max of 49 else it must be a company-public

4. If you stand surety for someone in a loan the banks view that as a 100% commitment for the full loan in your name even though you are not paying the bond etc SO be very careful here.

5. Taxes/Penalties - You don't face that for owning BUT you will pay Capital gains Tax when you sell and make big profits. However remember you will always pay tax on income in any case, there is no getting away from this. In fact you should dream of paying the receiver of revenue a million rand tax because then you have made some serious money!!!

6. Typical the shortest time is one year, but you can sell immediately after taking ownership. The penalty is 3 months interest of the mortgage. Sometimes its worth it. This is actually not a big deal if you are making a good profit on the sale. i.e on R 500,000 bond the interest is about R 4500 per month initially so you may be billed with a 3*R 4500 penalty = R 13,500.00. But if your profit is R 55000 then its worth it.

7. Buying vacant land and developing later not a bad idea, however getting a 100% loan on vacant land is less possible and usually if you get this its over 15 years vs 20 years and your monthly payments are higher.

8. Buying off plan can sometimes seem cheaper but trust me the developers build everything into the development costs so nothing is free.

9. With all deals there are attorneys fees for transfer and Registration of the bond and your safe bet is to work on about 7% of the deal. i.e R500,000*7% = R 35,000 It will be less than this but build in this factor ALWAYS If you save use the money elsewhere

10. Lastly - Make sure your mortgage has an access facility - this is where you become your own banker and start saving money

I hope this assists all you budding property moguls!!!!!

If you want us to do an affordability study for you we will and that will clearly tell you where and what you can buy email me

Have a great weekend