Monday, 25 May 2009

Absa Affordable Housing Enhancements

Absa Affordable Housing Enhancements

In light of changing market conditions, particularly at the lower end of the housing
Market, Absa Home Loans have taken a strategic decision to increase the income levels
Of the MyHome product and Affordable Housing segment.

The product offered within this segment

A: Income less than and equal to R11000 (Gross Joint Household Monthly
Income): Absa MyHome product

- Loans up to 110% Loan To Value LTV and Maximum 80% Risk to Value (RTV)
- Borrower Education for all customers with loans in excess of 80% of the purchase price.
- Repayment term up to 30 years (default if not specified; i.e. 20 years)
- Credit Life Policy – Home Loans Protector Plan
- 30% Collateral Replacement Indemnity Scheme (CRIS)

B: Income between R11 000 and R15 000 (Gross Joint Household Monthly Income):
Absa Affordable Housing
- The business as usual home loan rules will apply

The Collateral Replacement Indemnity Scheme (CRIS)

In order to mitigate the risk between 80% to 110% customers must either provide a cash deposit, Employer guarantee, government guarantee, Pension Supported Home Loan or other acceptable Guarantees.

If the customers cannot provide collateral, Absa will provide a CRIS ( Collateral Replacement Indemnity Scheme) guarantee from the Home Loan Guarantee Company (HLGC). CRIS is effectively a bad debt insurance product. HLGC will cover the guarantee amount Agreed upon, to reduce the potential shortfall amount recovered after sale in execution of The property.

a. CRIS Rules and Requirements:
- The insurance cover period is 5 years from the date of registration and this may be renewed.
- All customers with CRIS must attend Borrower Education
- HLGC will provide a CRIS guarantee of up to 30% (80% RTV to 110% LTV)
- New CRIS loan will be administered by the Home Loan Administration Centre (HLAC)
- Any accounts in arrears will be administered by Secured Collections.

Please Note: Absa home loans systems will allow a maximum of 110% to Purchase Price and Loan to Valuation without you having to capture an employer or personal guarantee for all
Applications where the Total Household Gross Monthly income is between R1500 and R11 000
And the customer does not have a deposit or other types of collateral security.

Thursday, 21 May 2009

Lets Decline Bonds but Up Admin Fees!

Go Standard Bank. At the moment, the top bank amongst PEOPLE of South Africa and Bond Originators!

Not sure if any of you follow property news but if you read this article last week:

READ IT & then I'd like you to read the below:

Quoted from: Mr Charles Black an independent International financial specialist... and a Standard Bank multiple mortgage, savings and fixed deposit client.

Well this smacks of greedy banking and badly managed banking practice. It simply seems that unless you have the banks insurance you will pay more, smells of forcing people to use their insurance and removing the fairness practice of freedom of choice. Hit the free hardest, in their pockets. My insurance is at least 20% cheaper than that offered by the banks, now I need to switch this back to them, and save less and still pay higher monthly fees.

With regards internal costs why not do some good and save paper and the trees by being the first bank to go paperless and have statements available in electronic format and only printable at an ATM at the clients costs. That's good banking.

The comments of protecting its deposit holders scares me, try deposit cash, then you will see what it costs the deposit holder. I think this is pointing at similar issue to elsewhere in the world. Is Standard Bank running out of cash? Is their a liquidity problem looming and a bailout looming. Is the loan versus deposit ratio out of kilter and the result being that more deposits are required. Is the man in the street being asked to pay more to cover rising defaults and the costs thereof.

Simply put I think Standard Bank needs to be very clear on the message they put out to the person who banks with them. As a client I expect service and if I don't get what I want I should change banks. That's what I intend to do. After all, its our money, that we have invested with them, that they say they want to protect, but it is the same "we" who are being penalised by increased costs, lack of lending facilities and who risk being at the banks mercy". Standard bank needs a wake up call.

Thursday, 7 May 2009

Self Employed? Wait 2 years before you get a mortgage!

It's a HOT topic!

(Please take a few of these comments with a pinch of salt, I have been slightly sarcastic with certain comments)

Something that I've been wanting to let out for a long time!

When governments /banks & countries are in a recession, what is it they always ask of their citizens?

What is the biggest financial sector at the moment, that governments are trying to punt?


Self Employed Individuals.
The banks and governments are pumping millions and millions of rands into "small business start ups"!
Why? Well, small business start ups bring "entrepreneurship" and ideas to a stagnant and declining economy. It's a sure way to make sure that the countries, youth and ideas don't fall along the wayside and it's a good way to keep stimulating the economy especially when big giants start collapsing (

So where the hell am I going with this, you may be asking yourself?

Well I just so happen to by the Entrepreneur magazine every month, it happens to be the best business magazine I've ever read locally and abroad, and there's talk of billions and billions of rands available in small to medium business start up funding! GREAT! I LOVE IT! Means more money gets put into the economy and the fact that alot of this funding is coming from the banks is even better, they know what they're talking about.

Here's what pisses me off!

If you're an ABSA home loan clients don't even think of applying for a home loan unless your company has been running for 3 years!

If you're an FNB / Nedbank or Std client don't even think of applying for a home loan unless your company has been running for 2 years!

BETTER YET, Nedbank and Std bank won't accept self employed people unless you bank with them.

What I love most!!!!!! If you earn cash, even if you declare 100% of your cash and deposit 100% of your cash into your account and pay taxes on it, they still won't give you a bond!

This means that unless your company has been running for a full 2 years & you meet the following requirements, YOUR MORTGAGE APPLICATION will be declined:

1. 2 full years of audited financials (These must matchup 100% with your business bank account transactions)
2. 12 months bank statements for your personal account
3. 6 months bank statements for your business account
4. A letter of income that states what you earn every month (MUST REFLECT IN YOUR PERSONAL BANK ACCOUNT AS A SALARY)
5. IT34 that must prove the amount of tax you pay every year


So here's the summary of what Self Employed individuals can and can't do!
- Never ever run a cash business (pilates, gyms, private tutoring, schooling etc etc), the banks want to make money of every transaction you do, heaven for bid you should save R5.
- Make sure everything you earn is declared (or not visible)
- Make sure you pay accounts to do your financials and books (even if you're not making that much money)
- Pay your TAXES!!!!!!!!!!!!!!


Absa home loans, Nedbank home loans, FNB home loans and Std Bank home loans!

This letter is to you!!!!