Bond originators explained

What a bond originator does

When you buy a home, you can apply for a bond at your own bank, apply at several banks yourself, or use a bond originator. The originator collects your documents once, submits your application to several banks at the same time, and helps you compare the offers that come back.

How they are paid

Bond originators are paid a commission by the bank that grants the loan, not by you. Using one should not cost you anything, and a reputable originator will confirm that in writing. Ask which banks they submit to, because not every originator works with every bank.

Why it can save you money

Banks compete for good borrowers, and offers on the same application can differ. On a R 1,5 million bond over 20 years, a rate of prime minus 0.5% instead of prime saves about R 500 a month, which adds up to more than R 120 000 over the term. An originator also handles follow-ups with each bank, which saves time when you are under pressure to meet the bond deadline in your offer to purchase.

Documents you will need

• Your ID and proof of address.
• Three months of payslips, or two years of financial statements if you are self-employed.
• Three months of bank statements.
• The signed offer to purchase.
• Details of your debts and monthly expenses.

Prequalification first

Many originators offer a free prequalification, which checks your credit record and affordability before you start house hunting. It shows sellers you are a serious buyer and tells you what price range to look at.

Frequently asked questions

Will multiple bank applications hurt my credit score?

Applications for the same home loan made through an originator at the same time are usually treated as one shopping exercise, but avoid lots of separate credit applications at once.

Can I still negotiate with my own bank?

Yes. You can show your bank a better offer from another bank and ask them to match it.

Does using an originator take longer?

Usually not. Applications go to several banks at once, so offers often come back faster than applying one bank at a time.

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