Bonds - Everything You Need to Know

Navigating the ins and outs of property bonds can be a daunting task. This week at The Agency, we sat down with Yvonne Viljoen from Ooba Home Loans - an expert on all things bonds - to get you the inside scoop.

Yvonne, the Mortgage Magician

With a background in law, Yvonne embarked on her career journey while studying for her LLB. During this time, she gained valuable experience working part-time in the Home Loan division of a bank, where she was introduced to the intricacies of home loan finance. Upon moving to Cape Town in 2000, she transitioned into the property industry, specialising in mortgage origination.

Despite being away from Johannesburg for many years, Yvonne still carries the vibrant energy of the city with her. She considers herself a dealmaker, often referred to as a "mortgage magician" for her ability to think outside the box.

With 24 years of experience and considered one of the top bond originators in the country, Yvonnes' deep understanding of the home loan journey equips her with the passion and motivation to make the journey as seamless, informative, and transparent as possible.

Yvonne's Top Tips

"Whether you're a first time buyer, or seasoned investor, do not go shopping without checking how much money you have in your purse! Similarly, my top advice for any prospective homebuyer is to get pre-approved", says Yvonne.

During the pre-approval process, Yvonne meticulously assesses the buyer's affordability and provides comprehensive guidance to help them gather the necessary documentation and data.

This ensures that the information presented to different banks aligns with their criteria, ultimately leading to the best possible outcome.

Yvonne offers guidance on all associated costs involved in both buying and selling a home.

She says, "by taking this proactive approach, buyers can navigate the homebuying process with confidence and clarity, setting themselves up for success".

One of the most valuable savings tips she offers to buyers is, "to consistently make extra payments into their bond".

"Activating and linking your access bond is essential, allowing you to leverage it to your advantage. By depositing any spare funds into your bond, you effectively reduce the interest accrued and shorten the loan term", says Yvonne.

The beauty of a fully functional access bond lies in its flexibility. You can always withdraw the funds when needed. However, while the money remains in your home loan account, it continues to work for you by saving on interest costs. This strategic approach not only helps you save money in the long run but also accelerates your journey to debt-free homeownership.

What to Look Out For

One of the most common pitfalls Yvonne has observed is buyers assuming they know the type of home loan they qualify for without undergoing a pre-approval process.

This often leads to disappointment when they set their sights on a property they later discover is out of their financial reach.

Additionally, many buyers overlook the various costs associated with purchasing a home, such as transfer costs, bond registration fees, bank initiation fees, pro rata rates and taxes, levies, and moving expenses.

It's also important to note that while your own bank may seem like the obvious choice, it's not necessarily guaranteed to offer the best deal upfront. Shopping around and comparing offers from different lenders can help you secure the most favourable terms and conditions for your home loan. After all, committing to a home loan is a significant 240-month endeavour.

Collaboration is Key

Partnering with a Mortgage Originator before beginning your property search allows them to assist you in understanding and planning for these costs.

Mortgage Originators are the specialists in their field and can ensure they achieve the best deal not the only deal. Originators work hand in hand with your own bank to ensure they compete fairly for the business. Ensuring that you secure a mortgage tailored to your specific needs with the best possible terms and conditions is essential.

Understanding the nuances of your home loan is equally important. Access bonds are a standard feature of most bank home loans and can serve as a valuable savings tool.

By leveraging features such as access bonds, you can maximise your savings and achieve your homeownership goals more efficiently.

Entrusting your home loan process to a reputable mortgage originator ensures that you receive personalised advice and secure the most advantageous terms.

Yvonne's Ultimate Advice

When asked what she would tell people, if she could only tell them one thing, Yvonne said, "The ideal time to purchase property is always now. Investing in property, especially at a young age, is highly advantageous. Property remains one of the best long-term investments, whether for personal residence or rental income."

By conducting thorough research and due diligence, you can ensure that your property investment works in tandem with your overall investment portfolio.

Property not only provides a stable asset but also offers the potential for wealth accumulation over time. By incorporating property into your investment strategy, you diversify your portfolio and increase your overall asset wealth.

Seize the opportunity to invest in property as soon as possible. With careful planning and strategic decision-making, property can become a valuable component of your financial future.

The Year Ahead

Yvonne and her specialised team have put together five predictions for the year ahead. These valuable insights provide clients with a guide for what to keep in mind on their property and bonds journey.

1. Interest Rate Reductions:

Anticipated interest rate cuts from Q2 are poised to stimulate homebuying, enhancing consumer affordability and market sentiment.

2. Co-Buying Growth

Co-buying is set to gain momentum in 2024, offering enhanced affordability, larger deposits, and shared costs in property taxes and maintenance.

3. Solar Finance Integration

Financing solar systems through home loans is predicted to become commonplace, viewed as a cost-effective option. Properties with green features, including solar systems, may command higher prices.

4. Sectional Title Properties

The popularity of sectional title properties is rising, driven by factors like enhanced security, lower maintenance costs, amenities, and community living. Affordability, especially for first-time buyers, is a key driver.

5. Resurgence of First-Time Homebuyers

As the economy recovers in 2024, first-time homebuyers are expected to return. Reduction in interest rates and incentives like zero deposits and cost-inclusive loans may boost their demand.

In closing, partnering with experts who take a proactive approach to staying informed about property and finance policies and legislations offers buyers a holistic approach, tailored to your specific needs. When your partners go the extra mile - a space never crowded - you ensure the best outcome for your personal and property buying journey.

As experts, both The Agency and Yvonne are passionate about guiding our clients through the home buying and loan processes, leveraging our expertise to secure the best outcomes for our clients.

Ready for your next home or investment? Let's connect!