Secondary MarketThe secondary market is multi layered as follows:
Un-bonded properties-these are properties that were built without any financial assistance from banks and also includes old “ 99 year lease hold. Subsidy homes/breaking new ground(BNG) Homes-formerly were known as RDP, were given to people by government for “free” to address housing backlog in South Africa
- Lending will be limited to 60% or loan to value or R100 000 of the valuation whichever is the lesser.
- Customers must produce the original title deed.
- Customers must attend Borrower Education sessions to be arranged by Absa.
- Ensure that pre-emptive clauses on the top structure has lapsed on Subsidy Homes/BNG homes and /or there are no restrictive conditions of title of any sort.
- Income between R1500 to R13000( Gross Joint Household Monthly Income)
- Minimum Loan size from R20 000 to a maximum of R400 000.
- Customers who have the original Title Deeds of the property being bonded
- The MyHome product – Joint Gross Monthly Household Income less than R7500
- Purchase price plus costs (Maximum risk to value of 80% and maximum loan to value 110%)
- Collateral Replacement Indemnity Scheme (CRIS) up to a maximum of 30%
- ABSA Home Loan Protector Plan
- Borrower Education-every client who takes up CRIS
Loan Inclusive Costs
- Where customers do not have their own costs i.e Initiation Fee and/or Bond registration these costs can be built into the loan granted amount limited to the customer’s affordability, however the maximum loan to value /Risk must not be breached and this only applies to MyHome.
- Borrower Education empowers customers with knowledge to enable them to make more informed decisions about a home loan, their finances and lifestyles
- Knowledge leads to greater financial independence which leads to the adoption of better,more informed financial practices.
- Limits or reduces the incidence of default.
Compulsory Borrower Education
- All customers who have Collateral Replacement Indemnity Scheme (CRIS)
- All customers who are buying a home for the first time
- All customers who are applying for home loan finance for the first time.
- Affordable Housing MyHOME customers will also receive the following additional propositions:
-FlexiReserve Advance ( prepaid) option
-Homeowners Comprehensive Insurance
- Home improvements include: alterations and extension made to the property i.e adding a room or building garage or various other home improvement options or Cosmetic improvement i.e tiling the home, painting ,plastering. All this will increase the value of the property.
From what I've heard, the lending policies on the ABSA MyHome product are alot more lenient than on your normal home loan, so credit policies will most likely not be as forced as well.