If it’s time to buy your first home or your next home, KW Select is here for you every step of the way. Firstly, there are so many terms to navigate and whether you are new to this or it’s old hat, they all apply to you when you apply and are granted a home loan.
The Repo Rate Trumps it all
Essentially the Repo Rate is the big “Makulu Baas”. The repo rate affects not only your monthly repayments on your home but pretty much any high purchase (HP) agreement you have in place. There will be fluctuations in the repo rate if they go up, meaning you pay more for your credit than you do when the repo rate goes down, which rarely happens. The repo rate affects the prime lending rate and this WILL affect your monthly bond repayments.
Essentially the repo rate is the rate at which the SARB or South African Reserve Bank lends money to privately owned banks. If the repo rate goes up then so does the prime lending rate which is the rate at which banks lend money. When the repo rate goes up, your rate with the bank goes up as well. The MPC or Monetary Policy Committee which meets three times a year, decides whether to raise the repo rate. If the MPC lifts the repo rate then our mortgage repayment amounts lift or are raised.
What is the Prime Lending Rate?
The prime lending rate is the cost of this finance, which affects products you have bought as a loan. This is the rate at which banks are able to lend money to homeowners like you and me. We already know the repo rate directly impacts the prime lending rate. But lending money from the banks also secures additional interest on the item you have purchased. Banks will take your risk profile into account and this is where the real fun starts. And every bank prices for risk a little differently. When you work with a bond origination company like Multinet, they leverage all these considerations. They are here to negotiate the best rate and the best deal with all the major banks. They work for you and work to get the terms you want and need on your home loan.
Depending on how the banks interpret your individual risk profile banks to charge for risk. If you have a low-risk profile you will benefit from further concessions on the rate that Multinet is able to secure for you.
What is a Rate Concession?
When you buy a property when the repo rate is down, Multinet will apply to all the major banks to get you the best rate or rate concession, all to secure the best rate on your home loan application. And what makes this great is that you don’t pay when you apply for a pre-approved home loan. KW Select, in partnership with Multinet approach all the banks. This provides a good view of what is out there and what the best deal is for you to consider with a leading SA Bank.
What is a Variable or a Fixed Rate?
If it’s time to buy and you know it, then let’s start with a home loan application. A fixed interest rate is just that. It may cost you a little more to fix your rate, but you have the same rate for the term you agree on. This means if the interest rate goes up your rate stays the same.
A variable interest rate is variable in its very nature. This means, that if the repo rate goes up and the prime lending rate goes up your cost of finance is directly impacted. As a result, your monthly bond repayment amount goes up as well. But when the rates come down so too does your monthly repayment amount come down. The rate you agree to when your home loan, therefore, affects the term of your loan. And, Multinet is there to get you the best rate for the term of your home loan.
Need a Home Loan – get a pre-approval now
KW Select in partnership with Multinet is there to help you. And we offer same-day service. Click here to enter your details online and Nellie from Multinet will contact you via e-mail. She will ask you for the required documents to get started. And, trust me she fights hard behind the scenes to get you the best rate on the terms that are tailored to your personal situation.
Get in touch
So, if it’s time to get started on your home loan application before you get started with your house hunting look no further. Click here to get started with your home loan pre-approval. If you need to sell a property before you can buy, click here to get a free property valuation. Finally, if you are looking to buy your dream home, browse through the properties KW Select has on the market at the moment, click here. And if you need to talk to a real person, call (083) 550-1220 and we will get you going. We have a vast network of almost 1,500 top Keller Williams agents at our fingertips who are all just dying for the opportunity to partner with you to sell and conclude your property transaction in record time.
If you want to view all the Keller Williams properties across the country click here to start the search for your dream home.
Bank on the Best with KW Select.
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