Why Bond Originators Play an Integral Part in Home Loan Approvals

Wording – Chrissie Johnson


Bond originators achieve a high rate of success when it comes to getting a home loan approved and prospective buyers should undoubtedly take cognisance of this fact, together with the beneficial value-added services that bond originators have to offer.


So, what is a bond originator? A bond originator is a professional who acts as an intermediary between you and the lenders, such as banks or other financial institutions, that offer financing on property. Bond originators manage the entire home-loan application process on behalf of the buyer, which includes completing the application forms, gathering supporting documents, writing individual loan motivations, submitting applications to multiple banks, comparing the different offers provided by the lenders and further negotiating the best deal for the client with the lowest possible interest rate.


Assess your financial profile.
To assist in achieving a successful home loan a bond originator will initially assess your financial profile. Serious buyers should do this before they start their search for a property so as to understand their budget is based on affordability, and what their existing credit score is. These two factors affect suitability for a home loan. If problems with a credit score are picked up, then this needs to be corrected before any application is made for a home loan.


Pre-qualification advantage
Once a buyer’s purchasing capacity has been ascertained bond originators can also arrange for prospective buyers to obtain a home-loan pre-qualification certificate. This is a good indicator of value which a lender will loan. Being prequalified enables buyers to focus on homes they can afford, and it also gives home sellers a greater level of comfort in accepting an offer to purchase. Since most bond preapproval certificates are usually only valid for 60 – 90 days, buyers should wait until they are ready to actively search for a home before they get pre-approved.

Best advice
Bond originators are also able to identify issues that might prevent prospective buyers from obtaining a home loan and can thus provide suggestions and solutions as to how these can be rectified before the buyers apply. This might require a bigger deposit, how best to structure the home loan to reduce your monthly repayments, or how to save on interest over the long term. Additionally, there are also extra costs that buyers are often not aware of, such as bank initiation fees as well as bond and transfer costs, which a bond originator can also explain and offer sound advice on.


Fast turnaround
Through submitting a complete and verified set of documents bond originators can typically get home-loan applications processed in just a few days. However self-employed applications could take slightly longer particularly if the lender requests further information. During the bond application process bond originators motivate and monitor the progress of each application, so that they can keep clients informed and shorten the wait for an outcome.


Negotiating for better rate concessions
A bond originator compares the different home loan products from various lenders and will often engage in negotiations to achieve a better rate. Here are just a few of many examples of what Cindy Kirchner of MultiNET Home Loans has achieved for clients of Local Real Estate


Instance 1
The client applied for a 100% loan for a home loan of R3 500 000 from her own bank, her bank offered a rate of 12% on a 100% loan. Since the application was submitted to multiple lenders, the client was offered a better rate of 11.94% from a second bank to whom the client was willing to move over her financial portfolio to. Multinet proceeded to further negotiate with the client’s own bank on her behalf which resulted in a rate offer of 11.35% over a 30-year period. This negotiation amounts to a saving of R626 851 in interest over the term, with a monthly repayment saving of R1 741.

Instance 2
The client applied for a 90% loan for a mortgage of R7 000 000. The client was offered a rate of 11.20% over a 20-year period whilst the client’s primary bank offered a rate of 10.72%. Once again Multinet negotiated a rate of 9.95% over a 30-year period with the client’s bank. The final rate was prime less 1.80%, this negotiation amounts to a saving of R1 407 315 in interest over the term, with a monthly repayment saving of
R3 909.


Cindy points out that “as of today, the current interest rate is 11.75%, so it is extremely important to ensure that a client gets the best rate for a long-term investment” She highlights these top factors that impacts the final rate offered by a lender:

A client’s financial situation.
A client’s credit score, a score of 670 and above, will have a good result on the rate offered.
The deposit can make a significant difference, the higher the deposit the better the rate.
A client’s personal qualifications and payment profile.
A client’s internal profile with the bank.

Cindy also adds that “I have found that in KZN there have been several applications of self-employed individual which results in much more documentation being requested by the lenders. It is noteworthy to mention that the lenders request this to understand the nature of the business. We collate a variety of information to formulate strong motivations to ensure that the home loan application can become a reality. I have also found that the clients’ personal bankers change from time to time. Which can also cause delays on the client’s behalf. In the cases when asked to assist, we are usually successful, and this helps to secure the sale before the offer to purchase expires.”

Providing information on new product offerings and timelines
Constant changes in product offerings can also impact the outcome, a bond originator is always.
up to date with these changes and will ensure that the client stays in the loop. A new change in the market
is the age limit for mature buyers. In today’s times many people are working past the “normal retirement” age, and many lenders now allow for a mortgage to be settled at age 75. Additionally, Multinet Home Loans exclusively submits to SA Home Loans, who also offer a bond repayment period of 30 years.

With access to updated information, prioritizing data integrity, enabling buyers to compare the offers from various lenders, attaining better bond rates through sustained negotiations, achieving better turnaround times, providing a lessened hassle factor –all this at no cost to the buyer- it is no wonder that bond originators are essential for home loan approvals.


This article is for general information only and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Local Real Estate would like to acknowledge the much-valued assistance provided from Cindy Kirchner,
a Home Loans Consultant from the independent mortgage originator Multinet in compiling this article.