Before you consider switching your home loan to another financial services provider, we suggest you do your homework.
Stanley Mabulu, head of sales at FNB Home Loans, says lenders have made it easier for consumers to switch home loans, provided that they meet all the criteria and requirements. But why would anyone want to switch banks? Mabulu says, “There are many reasons why consumers consider switching, such as getting better service and value, favourable interest rates, consolidating finances when getting married and long-term cost saving.”
Consider these important factors to reach your goals and get the best value possible from your bank/FSP:
1.New home loan
When switching, you are technically applying for a new home loan with the lender of your choice. As a result, a full loan application has to be completed, followed by a standard affordability and credit assessment that is line with the National Credit Act (NCA) requirements.
Fees that you would normally incur for a new home loan, such as the initiation and bond registration fees, are also applicable when switching. You are also likely to be charged an early termination fee by your current home loan provider should you fail to inform them 90 days prior to cancelling your bond with them. In order to take the angst out of switching, some lenders often give customers discounts or take on some of these fees to make the process easier.
3. Switching to your primary bank
It is advisable to bank with the provider that has bonded your home, as this could give you more value and provides flexibility in managing your finances.
4. Shop around for the best deal
It is standard practice for lenders to entice customers with irresistible offers to switch. However, when planning to switch make sure that you have consulted all major lenders and weighed the value and benefits offered before making your decision.
Source: FNB. Image: Pixabay