It's been chaotic and exciting to say the least...
The last month in South Africa has been a shock to the home loans and property barons and I think it's definitely worth a nice little summary. For those of you who missed all the excitement, well, here's your chance to catchup!
To summarise it all, I'd say the 3 major impacts and stories have been the following:
The National Credit Act
Rudco Financial Services
First was the property boom, prices rising, interest rates dropping then, WAM BAM, thank you MAM, here comes the National Credit Act. All of sudden, investors who were purchasing homes by the dozen every month, found out that they could no longer afford (REALLY AFFORD) anymore property. Banks started declining bonds left right and centre because people were hiding money from them and claiming they were earning R60 000 a month when there statements were only showing R20 000 worth of income.
To top it off, the interest rates went up! WHAT THE HELL! Well, it's not all bad. What it means is that the banks and financial institutes can no longer loan money to people who cannot afford it! It's going to curb credit lending which is great for the economy, LESS DEBT, plus all those people who've been hiding money from the TAX MAN, will no longer be able to do it with property unless you buy it cash. Either that or you need to start showing the banks where that money's coming from.
Wizard says, YAY to the National Credit Act!
Now here's a story that's been causing a stir. Rudco Financial Services came out this week with a special, "The first 1000 people to sign up with Rudco get their home loans at 6% interest". Talk about a stir. It's had the home loans companies up in arms and it's got people asking ALOT of questions.
Firstly, well done to RUDCO, it's caused such a publicity STIR that I'm pretty sure they've already got their first 1000 deals signed up. The reason Rudco got everyone talking though was due to a couple of "suspect" things that bugged us.
1. Where is there financial backing coming from? Why won't they disclose it?
2. They're not registered as a financial institute!
3. What happens if they go under? What happens to their clients?
4. Offering home loans @6% gives clients the false impression that they can afford that R1 000 000.00 property. If Rudco go under, and the client needs to switch to a bank. Their interest rates are going to jump to 13%. WILL THEY STILL BE ABLE TO AFFORD IT!
All in all though, Wizard do wish Rudco the best of luck. Banks needs competition, maybe it's the first step!
This is something that just pisses me off! The banks and their bank charges. Now I can understand bank charges. I understand that we have the highest ATM crime rates in Africa (or the world for that matter) and that banks need to replace all the broken ATM's. Let me tell you though that paying R15.00 for every debit order that comes off your FNB cheque account is pathetic! I also believe that paying R20.00 to draw money from an ABSA ATM vs a FNB ATM is absurd!
The banks in this country are not making it easy for people to live! They're not helping South Africans and they're not helping the MAJORITY of South Africans (underprivileged) in making this a country to want to stay in!
Read this article that STORM posted, read it carefully and you tell me what the hell the banks in this country are thinking!!!!!
But ladies and gentlemen. Apart from that, we love this country!
You cannot say that this isn't an exciting country and an exiting time in South Africa.
Thanks again to all the readers and the input everyone has had on our BLOG over the last 3 months.
I'm OFF TO DULLSTROOM!