Originators better than your bank
Many homebuyers still believe that their best chance of obtaining a home loan is to apply to their own bank. “This is not necessarily true; our statistics show that while 83 per cent of our clients request that we first submit their home loan applications to their own banks, almost half of these applications are …
Many homebuyers still believe that their best chance of obtaining a home loan is to apply to their own bank.
“This is not necessarily true; our statistics show that while 83 per cent of our clients request that we first submit their home loan applications to their own banks, almost half of these applications are initially declined and would have less chance of success if we could not then submit them to other banks for consideration,” says Rudi Botha, CEO of BetterBond.
He adds that as it is, their “rescue rate” for own-bank applications that have been declined is currently 29 per cent, which means that they are able to help about one client in three who is turned down by their own bank to secure a home loan from another institution.
According to Botha statistics also show that its initial approval rate among all home applications rose from 49 per cent to 51 per cent year-on-year in January, with a further 16 per cent being “rescued” each month.
“What this means is that almost seven out of 10 potential borrowers who come to us for help in getting a home loan will be successful, whereas only about five out of 10 who go to their own bank will be successful.”
He says that the steady overall recovery of the residential property market is evident in the rising number of property registrations.
“At the height of the market, in 2006, approximately 40 000 home sales a month were being registered in the Deeds Office.”
This plunged to about 14 000 a month in 2009, during the global recession, but has steadily risen back up to reach about 22 500 a month, including cash sales.
“What is more, the industry-wide bond application approval rate of about 51 per cent is more than double the 24 per cent that was being achieved when the market hit bottom in 2009, so things are definitely looking up,” Botha added.
