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Cape Town - While in theory a bond originator will shop around and find the best deal for the buyer, in reality the customer could often end up paying more, according to Kevin Penwarden, chief executive of SA Home Loans.
"We don't work with bond originators, preferring to pass on the commissions we would have paid them to our customers," says Penwarden.
"As a result, bond originators won't tell you about SA Home loans, so you'll only see offers from the four big banks."
Penwarden believes it's no longer a given that a bond originator is able to secure the best rate, even from the limited selection of lenders they do work with.
Slashed commissions
"There was a time when banks paid quite generous commissions to bond originators. But more recently, they've slashed commissions to third parties and followed our example by focusing on their in-house mortgage teams," he said.
"As a result, you're often more likely to get a better deal from the banks by approaching them directly."
Penwarden says understands why people prefer to use bond originators, as they then avoid the frustration of dealing with bank bureaucracy and receive a response much more quickly.
He said SA Home Loans is often mistakenly identified as a bond originator.
“We're most definitely not a bond originator. The only thing we have in common is that we help you avoid the pain of interacting with the banks," he said.
- Fin24
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"We don't work with bond originators, preferring to pass on the commissions we would have paid them to our customers," says Penwarden.
"As a result, bond originators won't tell you about SA Home loans, so you'll only see offers from the four big banks."
Penwarden believes it's no longer a given that a bond originator is able to secure the best rate, even from the limited selection of lenders they do work with.
Slashed commissions
"There was a time when banks paid quite generous commissions to bond originators. But more recently, they've slashed commissions to third parties and followed our example by focusing on their in-house mortgage teams," he said.
"As a result, you're often more likely to get a better deal from the banks by approaching them directly."
Penwarden says understands why people prefer to use bond originators, as they then avoid the frustration of dealing with bank bureaucracy and receive a response much more quickly.
He said SA Home Loans is often mistakenly identified as a bond originator.
“We're most definitely not a bond originator. The only thing we have in common is that we help you avoid the pain of interacting with the banks," he said.
- Fin24
Add your voice to our Property Issue:
* Write a guest post
* Share a personal story
* Ask the experts
