Applying for mortgages is a process that should ideally occur once you have done all of the necessary research into qualifying criteria. A good place to start is by understanding mortgages and interest rates.
When deciding which mortgage lenders are the best for your needs, ensure that you check for registered institutions. In South Africa, credit providers must be registered with the National Credit Regulator
Start by reading the fine print. This includes estimated closing costs, transaction fees and loan origination fees. There may be mortgage deals too. The best lenders will be transparent about the entire process as well as relevant costs.
More about mortgages and interest rates:
The interest rate that you are charged for your mortgage is dependent on a number of factors such as the loan to value ratio; your repayment to income; your credit profile and the size of your bond.
If you have a stellar credit record then you are more likely to have a lower interest rate. This may also be the case when you have paid a large deposit.
You will have the option to choose between a flexible and a fixed interest rate.
Choosing a variable interest rate is a good option if you think interest rates will be dropping in the short to medium term. Your repayments will be affected by fluctuations in the prime interest rate.
A fixed interest rate comes with the advantage of having consistent payments every month. You’ll know exactly how much you’ll have to pay every month.
Having a good understanding of mortgages and interest rates provides a good foundation for ensuring that you are paying the best rates.