Things you may not have known about bond origination

The bond origination industry has been growing steadily since it first started in South Africa in 1999. Besides originators offering their services to buyers for free, they also promise the best interest rate deal by approaching multiple banks. What many buyers don’t know is the depth of work that goes into this service behind the scenes. And how much this behind-the-scenes work can influence the options they get to choose from.

Stoking the competition

When a bond originator submits a home loan application to the banks, they immediately know that they are competing with other banks for the business. This means that the bank knows that if they don’t give a competitive offer, they will lose the business to another bank. If you apply personally to your own bank, the bank lands the business without any benchmark or competition to drive the offer.  There is no pressure – it’s a done deal.

Fine-tuning your application

Bond originators are experienced in presenting the right information to the right people at the banks. Since they work with the banks regularly, they have long-standing relationships with decision makers. Over the years they learn what works for these people and what doesn’t work. They know what is required for different scenarios at the different banks. This helps bond originators tailor each application to get the results they know they can get. Originators also advocate on behalf of the buyers to soften any concerns the banks may have. This does not mean that they bend the truth or embellish details. It means that they analyse each buyer’s circumstances and present each application in the best possible way.

The art of negotiation

Experienced bond originators know when they can drive negotiations further. They also know when a deal is reasonable, good or the best that a buyer can get. These originators will keep negotiating until they secure the best deal. Since they have access to the banking representatives – which the average buyer on the street doesn’t have – they can drive the negotiations until they are satisfied with the outcomes.

The banks pay bond originators commission for bringing in the business

There is a myth that bond originators work their fee into the home loan deal, which is really not true. Banks pay bond originators commission, which also means that the banks see bond originators as business partners. Instead of the banks having a sales department, and paying sales people to bring in the business, they pay originators to do this for them – without all the extra expenses that comes with an internal sales department. It also gives the originator direct access to the people in the banks that count.

If you are thinking about buying a home, you should really consider going through a bond originator like BetterBond. Our consultants take on the frustrating parts of the home loan application for you and, with their contacts in the various banks, will fine-tune your application and negotiate the best possible home loan deal for you.