Navigating banking systems is almost always stressful and time-consuming. This is especially true when it comes to applying for a home loan. Buyers, despite their best efforts, are not always successful when trying to obtain a bond independently. Imagine reapplying time and again, not entirely sure why the bank keeps denying your finance; it’s a pressure that is unwanted when preparing to make one of life’s most significant decisions.
“The issue for buyers is that the banking systems have been in place for decades and are unlikely to change, nor can they be manipulated or negotiated. A no is simply that, without explanation other than you do not meet the criteria. This makes an already stressful situation much harder and it really doesn’t need to be,” says Marcél du Toit, founder and CEO of Leadhome, a hybrid modern real estate agency.
Du Toit says that the role of bond originators has never been more important. In a complex economy and struggling market, buyers need all the help they can get: “As a service that comes free of charge, bond origination moves the onus from the buyer to the originator, who then searches for the most optimum financial deal. These experienced individuals have the agility and knowledge to successfully navigate the banking system, knowing how to achieve a successful outcome.”
Simplistically, originators take the pain out of the deal and receive a referral fee from the bank which motivates these individuals to get the best deal for the buyer. It should be noted that despite their best efforts, bond originators cannot always turn a no into a yes.
Du Toit says that buyers need to be aware of their credit score: “You need to know that the bank will review your credit history and affordability. They need to determine the level of risk as this will play a big role in the ultimate decision.”
What helps, when deciding to use an origination service, is to check how much you can afford, for which there are many home loan calculators online. Doing a personal credit check is also advisable to avoid wasting time and applying for a home loan that is beyond your reach.
The neutrality of the origination service is very valuable. There is no allegiance with any one bank, just a desire to get the buyer the best deal: “This independent advice is very valuable and useful as the originator can outline the pros and cons of each deal presented to the buyer,” says Du Toit.
From an administration perspective, filling out one home loan application is so much better than countless from different banks. Buyers only need to provide one set of supporting documentation too. Du Toit says that for most buyers this is extremely helpful: “There is so much to consider when buying a property, no one wants to be buried in administrative paperwork and dealing with multiple banks.”
Aside from the time saved, an originator can present the information in such a way that it has a greater likelihood of being positively received. Knowing how to work within a bank’s automatic credit scoring system is key to overall success. Originators know this system and have a much better chance of success than a novice buyer.
Timeframes are also shortened using a bond originator: “Their knowledge of the system and the relationships they hold within the banks can greatly assist in generating an outcome within 48 hours whereas an individual could wait weeks.”
Bond origination is about giving a number an identity. You don’t get lost in a system, there is an originator representing your application, and fighting for the best deal. Given it’s free, the use of this service is often a best-kept secret.
“Leadhome strongly supports bond origination services, acknowledging the need for this valuable service offering. Buying a house is never easy, therefore we advocate using services like these to make this process much easier,” says Du Toit.