Tuesday, 30 September 2008
Further to Standard banks previous changes where they announced the need to revise their LTV criteria for new loan acquisitions, Standard Bank have advised that they have put measures in place to further tighten those loan criteria.
Standard Bank have now made the following changes which will be implemented with effect from 5 October 2008.
The LTV adjustments are:
· R0K to R2.5Mil 95% LTV
· R2.5m to R3.0m 90% LTV
· R3.0Mil and above 80% LTV
Restrictions on Vacant Land remain as they were at 75% for Standard Bank Current Account customers. For non Standard bank Current Account customers the LTV will be 75% for loans less than R1m and 65% for loans greater than R1m.
In addition Further Advances will be restricted to 85% LTV, where they were previous 90%.
Standard Bank have recently communicated that collateral can be supplied in the form of government guarantees and covering bonds to support the deposits required.
Wednesday, 17 September 2008
What is this nonsense about a new National Credit Act?
Why the hell are banks no granting bonds anymore?
Are these questions similar to the headlines you've been reading the last couple of months on most of South Africa's blogs, websites and newspapers?
Well, let me clarify something for all of us today!
If it wasn't for the credit lending practices that we've put into place. If it wasn't for South African banks putting tightened grips on lenders and it wasn't for South African banks who decided not to sell off bad debt and try make money from it, we'd be in the same boat that most of America's banks and lenders are finding themselves in.... More debt than they can handle and liquidation.
So this article goes out to the South African Government and Banking Institutions for keeping their companies afloat and in turn making South Africa's banking and lending amongst the top in the world.
Well done SA... Well Done!!!
Tuesday, 16 September 2008
The doors are open, not closed, for good Mortgage originators and now is the time to look at your opportunity.
Home Loans are different and you do it all but the rewards are good for those who know how to pull finger and graft hard.
Rent is expensive, food is reasonable, petrol costs nothing and it's a hot place and ramadan is a time for reflection and sharing.
Monday, 8 September 2008
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.
Monday, 1 September 2008
Sanlam Money Manager.
What is “Sanlam Home Loans Money Manager” ?
The Sanlam home loans manager account is a facility available to Home Loan clients which allows the client to spread debt over more than one Home Loan account.
Sanlam Home Loan Money manager can ONLY be taken up on a new loan application or a Further advance application;
Each Sanlam Home Loan Money Manager Account can/will be subject to a different rate/rate structure and repayment term - Normal home loan rates/rate structure apply i.e variable / fixed
Each Sanlam Home Loan Money Manager Account has it’s own individual account number
The client can select on which “Money Manager” he requires the Flexi Reserve facility (Pre–paid option ONLY) - A client need not have FlexiReserve facility to be able to utilize this product
Each account must be paid via a separate debit order instruction which may be from a different source;
Each account will have a separate statement;
Up to 10 different accounts may be opened;
Each account can have it’s own designation e.g. Primary account: called: " Home Account", Secondary Account no 1 called: "Pool Account", Secondary account no 2 called "Holiday Account"