Property: The what's and why's of Mortgage Originators....
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With a myriad of mortgage products on the market, it is not always easy to know where to go to obtain the exact bond finance you need at the time andin the circumstances.That's where the mortgage originator comes into the picture, says SifisoMsomi of Shepstone and Wylie Attorneys' property department. "However, manypeople are unsure of exactly what services a mortgage originator shouldoffer and what benefits they provide", he adds.
He explains that the key function of a mortgage originator is to introduce a
borrower to a lender and to act as a personal consultant in an attempt to
help you obtain mortgage finance for a property. "The mortgage originator
will apply to and negotiate with a financial institution in respect of the
home loan on your behalf".
A mortgage originator should have a specialized knowledge of the various
products and rates available on the market in order to give independent
advice with the aim of obtaining the most suitable bond from the most
appropriate mortgage lending financial institution for your particular
needs. They should help you assess your affordability and explain fully and
in plain language the material terms which you need to be aware of to make
an informed decision.
"While you are not obliged to use their services, it can make the process
much quicker because of their familiarity with the process, products,
assessment yardsticks and requirements of the individual financial
institutions', adds Msomi. With a mortgage originator you only have to fill
out one application and they request only one set of the relevant prescribed
supporting documentation, such as identity documents and salary advice
slips, required by the financial institutions. They then submit the
application to the various financial institutions on your behalf and try and
negotiate a lower rate for you. "It is generally understood that a bond
originator is able to secure a cheaper rate than if you approached the bank
directly as they are on a better negotiating platform. A good mortgage
originator should also follow up with the financial institutions on a
regular basis and keep you informed," comments Msomi.
Once the mortgage originator receives the various quotations they should sit
down and help you to assess your options, advising you of the pros and cons
of each with your particular needs in view. "Essentially the final decision
should be yours after weighing up all your options and taking into
consideration the advice and recommendations of the M.O. Do not feel
obligated to make any specific choice."
Apart from providing you with information on the various mortgage products
they should also be able to assist you with conveyancing and related costs.
The mortgage originator is usually paid a fee or commission by the lending
institution with whom the loan is taken up, so the service should be free.
It should not be necessary to sign a sole mandate and if they request you to
sign any agreement between them and yourself make sure you are fully aware
of the legal and possible financial consequences.
"Remember they do not have control over and cannot therefore accept
responsibility for credit decisions or valuations made by the mortgage
lending financial institutions," he comments, and adds that it is a good
idea to approach a mortgage originator before you go house hunting so that
you know what loan amount you will be eligible for.
Should you have any problems complaints may be addressed to the Office of
the Ombudsman for Mortgage Originators which has been set up to deal with
complaints against mortgage originators who are members of the National
Association of Mortgage Originators.
NAMO can provide you with a list of their members and registered
Business News Sector Tags: Property|