So reckons Amdec Property Development’s head of bond origination Ronell Killian.

“Even though most applicants intend on paying the instalments which would apply to a 20-year repayment term, many apply for a 30-year repayment period as a strategic buffer mechanism to ensure their bond repayments remain affordable should interest rates increase,” explains Killian.

By doing this, she notes, it provides a degree of flexibility when it comes to a home loan repayment. “Qualifying for a longer repayment period does not increase the amount of interest paid as this is charged on the outstanding balance of the loan each month, unlike vehicle finance where the full interest amount is paid first and the balance of the loan only reduces once all the interest is paid,” she points out.

Also, with the introduction of the National Credit Act, Killian says that applicants will often qualify for a slightly higher home loan when applying for a longer repayment period.

Amdec Property Development’s in-house mortgage bond origination division secured finance for its clients to the value of R70 million during 2007 of which the highest home loan approved was R6,4 million and the lowest R100,000.

Amdec’s current development portfolio exceeds R4,5 billion, ranking it as one of the country’s biggest private property developers. In addition to Amdec’s clients, the bond origination service welcomes business from other developers, estate agents and the public at large, and advice is provided free-of-charge.

In addition to the actual bond origination process, Amdec advises clients on how best to increase disposable income to assist them in meeting the qualifications for a home loan in terms of the National Credit Act, and secure the best possible rates.

Amdec’s bond origination team operates throughout South Africa and has secured bonds in landmark property developments including Johannesburg’s vibey Melrose Arch as well as numerous residential developments in the Western Cape including Fisherman’s Village in Muizenberg, Kei Apple Lane in Constantia, Pearl Valley in Franschhoek and Normandy Village in Plumstead.