In South Africa the home buyer is confronted with a variety of different home loan options. This article is aimed at helping you choose the best home loan package from the options available in South Africa.
Before you start take time to become familiar with the home loan industry in South Africa by doing some research on the internet and finding out about the different options available. You can then make appointments with a few banks or mortgage originators to find out more specific details regarding their home loan products. To get professional advice and have someone shop around on your behalf for the best deals. They will then give you a list with the different offers available and you can decide on your first and second option.
If you decide to do all the work yourself you will have to look at all the different quotations from the different home loan institutions that you have gathered. The different options available can be viewed on the internet and in some cases you can ask for an online quotation or you can go directly to the different banks for a personalized home loan quotation. After you have your different quotations choose the two options that suit you the best with the second option as a fall-back if the first option does not materialize.
Choosing the best interest rate option for your home loan is very important and can make a big difference on the overall amount you end up paying on your bond. Interest is the additional fee that you pay when repaying the loan and can therefore differ from bank to bank. The higher the interest rate is, the more your loan will cost you in the long run so try to negotiate the lowest rate possible on your home loan. In order to get the best interest rate, it’s important to shop around and compare loan rates and terms before deciding on a particular home loan. Request home loan quotes from a variety of banks and finance companies, as well as online lenders.Your credit rating and the collateral that you use can also have a effect on the interest rate that you are charged on your home loan so make sure to give all the necessary information.
Home loans in South Africa can either be “fixed rate” or “variable rate” loans. A fixed rate means the interest rate charged is fixed for a specific time i.e. two years or more. This option is best when the interest rates are low or to make budgeting easier. A Variable Rate is better when the interest rates are higher, because they can go down if the interest rates go down. However this rate will also go up when the interest rates goes up.