Purchasing a home is an exciting experience but it can also be a daunting one. Where do you start when you’re looking for the best loan at the lowest possible interest rates? There are so many loan packages to choose from that you might find it difficult to choose the best one for you but with some sound advice you can take the steps that will assist you in finding the best home loans on the market.
How much do I Qualify for?
When applying for a home loan, the first thing you will need to find out is “how much do I qualify for?” The answer to this question will affect your next steps and it will determine the location and the size of your new home.
In order to find out how much you qualify for, you have two choices: you can use an online calculator that will use your current salary and the amount of debt you have attached to your name to calculate this amount or you can speak to a bond originator. It is always a good idea to turn to a bond originator in these cases since online calculators will only give you an idea concerning your worth and not a precise amount.
Once you are aware of the amount you qualify for, you can move on to the next steps – choosing a home loan and searching for your ideal property.
The Different Types of Home Loans
Before you apply for a loan, it is always a good idea to decide what home loan would suit your situation best. There are two types of home loans: 1. 100% home loans and 2. Access Bonds. 100% home loans cover the entire amount of the loan and all of the extras but they come at a high cost since banks will only offer this type of loan with a higher interest rate. Access bonds, on the other hand, will cover the rest of the loan once you have put down a deposit. Banks usually take the amount of the deposit into account when working out the interest rates and they will lower the interest because of this.
Comparing Bank Home Loans
The only way to ensure that you are getting the best possible deal on your home loan is to compare offers from different banks. By applying to multiple banks, you can look through each offer and determine whether the interest rates are similar or vastly different and choose the most affordable loan based on the types of interest rates, the loan term and the extras that accompany the loan. It is always a good idea to compare offers from the largest and most trusted banks in South Africa as they usually have the most variety when it comes to bond products and their prices are usually extremely competitive.
Contacting a Bond Originator
When it comes to home loans, you need to be able to understand the fine print or you might end up choosing an expensive loan. Bond originators can help you avoid this by applying for your loans, comparing the loans you are offered and determining which of the loans is truly the best.