Thursday, 28 April 2011

World property review Easter 2011

So here the mortgage and home loans and financial view from various world property market players - as an Easter gift for you.


Well the Japanese Tsunami and earthquake and subsequent nuclear leakage has raised fears of a de-accleration in global growth.

Higer oil prices leading to global inflation is being fuelled by turmoil in the MENA (Middle east and African) environments.

Greece, Ireland and Portugal continue to lead the way in credit rating downgrades and the propect of defaulting on debt payment is imminent - leading to Global European pressures.

However, world markets have amazingly ongoing signs of recovery - so we await mid year results all round.


It is possible to buy youir money at commercial rates and not get ripped off with expensive changes as you move along so getting your currency need not be expensive or a hassle. The First Premier Travel card through GCEN is now available to you.


The average we have seen a 12.8% increase in interest rates over the last month, based on the cheapest mortgage products on offer within our top 5 most popular countries. Spain has seen the biggest rise with mortgage rates now being offered from 2.68%, which is a whopping 42% increase from what was on offer last month. France has seen the second biggest rise (16.76%) with mortgages now available from 2.09%. With mounting pressure on both the Bank of England (BOE) and the European Central Bank (ECB) to raise interest rates we believe further rises will follow, but when and by how much are unfortunately key questions that nobody can answer with much certainty. However we continue to recommend to our clients who are thinking about buying or remortgaging a property abroad to consider acting now in order to secure these still relatively low mortgage rates while they are still available.

For more details on these exciting new mortgages please contact us.

Although mortgages are still available for foreign property buyers in Ireland we are unsure how long they will continue to be available due to the continuing banking crisis. Since the failed bail out from the International Monetary Fund last year, Ireland has still not resolved its banking problems, following an outflow of deposits and other banks being unwilling to lend to them. Currently many Irish mortgage providers remain dependent on the central bank for their day-to-day operations and until Ireland's new government has managed to conclude its talks with the ECB to secure medium-term funding for its banks, the decision on whether Irish banks will continue to lend to foreign property buyers remains unclear

In South Africa, you can get 100% home loans but conditions do apply and the credit criteria for lending remains strict.  Non-south africans can still obtain 50% mortgages.

8th Islamic Financial Services Board Summit

The summit is being held in Luxembourg 10th to 13th May 2011 and is a must for all financiers working with Islamic Financing.

Three events will precede the Summit, a Workshop on Islamic Finance and IFSB Standards for Institutions Offering Islamic Financial Services and Islamic Capital Markets, IFSB Country Showcases and Special Session on Liquidity Management in the Islamic Financial Services Industry which the IFSB is organising on 10 May 2011 and 11 May 2011 respectively. Luxembourg and Malaysia will be showcasing in the Country Showcases.

A core aim of the Summit is also to highlight the role of the various stakeholders towards developing a robust future for the IFSI. This is reflected in the five session topics of the Summit which cover:

• International Developments in Regulatory Landscape: Implications for Islamic Finance

• Financial Stability: Regional and Global Cooperation

• Developing Capacity Building to Enhance Financial Stability in the Islamic Financial Services Industry

• Enhancing Transparency and Market Discipline and Information Environment

so all good here!!!!!!


FRANCE:- Earlier this week (12th April 2011) French minister Francois Baron said that the French government aims to raise the threshold for households that have to pay wealth tax (ISF). Under the proposed reforms the threshold for households for the wealth tax would rise to those with assets of more than €1.3 million compared with the current rate of €800,000.

CYPRESS:-  Scottish Member of the European Parliament Alyn Smith has warned people not to buy property in Cyprus after floods of his constituents complained at being stung by the title deeds fiasco in the country.

SPAIN:- An economist at the University of Barcelona has warned that Spain’s house price correction still has a long way to go before the country’s property market can fully recover. Economics professor GarcĂ­a Montalvo uses reported house price and income data to calculate price to income ratios which currently stand at 6.4, way above the historical average of 4 years.

DUBAI:- Nearly 200 foreclosure cases are being currently dealt by Dubai Courts and the rate and frequency is likely to increase, top law firms believe. “Most of the conventional banks have claims and we understand that there may well be around 200 foreclosure cases coming through the courts at the moment,” Michael Dark, Senior Legal Consultant, Dispute Resolution, Hadef and Partners, told Emirates 24/7

Tuesday, 19 April 2011

Buy me some land today!!

Buying your own piece of vacant land

There is something about buying land maybe a few acres of wilderness appeals to your pioneer spirit.

Maybe it's a desire to build a house exactly the way you want, which means starting with an unimproved, vacant land in a new subdivision.

Buying land is different from buying a house, things that never come into discussion in a home purchase -- access, utilities, land-use restrictions -- become extremely important in a land purchase. When you buy an existing house, someone has already gone through the issues of what's allowable on the land.

After taking into consideration these factors, you have identified the property you are interested in and you have signed the offer to purchase then we talk about financing the property.

Are you going to be pay cash or acquiring a bond? If you are paying cash then this will be the end but if you want a home loan it’s just the beginning.

You will need to consider your credit record, affordability and then the LTV (Loan to value) offered by the banks on vacant land.

Looking at the 4 major banks we have here in South Africa, FNB is offering 60%, ABSA is also offering 60%, Standard Bank is offering 75% and Nedbank is not offering bonds on vacant without intentions to build.

Which means for you to apply for loan at Nedbank you must have your entire building documents ready i.e. building contract, schedule of finishes, NHBRC certificate, approved plans etc.

For the other banks you must have at least 40% deposit as well as the bond and transfer costs. I know what you are thinking it’s not fair, why? It’s all about risk; apparently vacant land carries more than any other loan. You will need to show commitment to the bank by putting down deposit.

If by any chance you default, you lose your deposit and property by so doing the risk is shared.

If you are a foreigner or non-SA resident then bringing in your money need not be an expensive option as you can do so free of transfer fees.

With all this in mind don’t forget the other ways of raising the deposit money, there is the pension based loan and the home starter loan. Visit a great mortgage originator.

Monday, 18 April 2011

Mortgage Originators like a cat with 9 lives

Awesome thinking in the market and challenge is on for some great service.

who will win, the banks(?) or the Mortgage Originators (?)

Body snatchers at work!!!

Thursday, 14 April 2011

Affordability and Your Homeloan

Affordability and Your Homeloan

Affordability is critical when applying for any form of loan.

Always we have to live within our means but sometimes because we want something so badly we end up spending more than we can afford. Well not in home loans as the banks came up with a strategy to make sure that this does not happen.

The banks, Standard bank, FNB, Nedbank, ABSA all use a ratio which they call the repayment to Income ratio (RTI). This is the percentage of a consumer's monthly gross income that goes toward payment of the bond or home loan and it is 30% maximum, or 30% of your monthly salary. I would say it’s better to find out how much you qualify for beforehand – before you waste your and the agents and everyone’s time only to find you do not qualify.

Let’s say you earn R15000.00 per month and want to know how much you qualify for?

Here is an affordability calculation for you;

Calculates the maximum bond you qualify for based on your monthly income

Date: 2011/04/11

Information Provided Calculated Results


Interest/Base Home loan rate: 9.00 % Affordable loan: R 500,152.29

Monthly repayment: R 4,500.00

Customer rate: 9.000 %
Repayment-to-income ratio: 30.00 %

Gross monthly income: 15000.00

Net monthly income: 7000.00

Gross monthly expenses: 8000.00

Bond term: 240 months or 20.00 years

According to this calculation you do qualify for the bond of R 500,152.29 and remember you still need money for the transfer and registration fees as well as a bank initiation fee, so budget carefully.

However, let’s say for instance you did not qualify for the bond, what were the options?

The obvious one will be to look for a property within your range. It may happen that this is your dream home and you wouldn’t trade it for anything, then you can either look for a co-applicant to come in with you and jointly you qualify. You have to bear in mind that the co-applicant’s credit record should be good because even if it’s a co-applicant you will be declined if the credit record is bad.

If you don’t want them to be a co-owner on your property then they can have a family member stand surety. With surety ship, the one standing surety has to qualify for the bond on their own and the credit record or score has to be good according to the banks criteria. This is where we say terms and conditions of banks apply.

That is not all, Globalfundi have introduced a new product called the Home Starter Loan which is aimed at helping you get you dream house. This is a mortgage aligned loan which only a person with bond which has been granted can apply for and you can apply for up to R70,000.00 which you can use to pay the difference or to pay the attorneys fees. This could give you that elusive 100% loan you are looking for.

They say the beauty is in the eye of the beholder and I say today know what you afford so that you can experience the beauty of owning your property as it is all in your affordability.

L Your mortgage consultant

Interest rates set to climb??

Is it my imagination or is everyone trying to force the interest rates to climb by speaking about it in the media??

Or am I being paranoid?

Friday, 8 April 2011

Your Home Loan and your Credit record

A home loan is a loan that makes the dreams of people to have a private dwelling of their own in a quicker and easier way. So if you are you looking for a home loan then you have come to right website.

I know you have your own fears when it comes to a home loan application and there are things you need to know before even signing an offer to purchases to avoid disappointments.

The very first the thing is to know your credit record.

This is very crucial in a home loan application, slow payments reduces your credit score and affects your credit record.

Your credit score is a number calculated from factors such as the amount of credit outstanding versus how much you owe, your past ability to pay all your bills on time, how long you've had credit, types of credit used and number of inquiries.

Some may argue and say I was late by one day but that will certainly reflect as a late payment and its one thing you must never do as one day it might cost you your dream home and affect your credit record and credit score.

Then comes adverse and judgments, what effect do they have on your home loan application? A judgment against you is the result of you losing a case in court. Usually, a creditor goes to court to get a judgment against you for the amount of the debt you owe.

Well with that, the first impression the creditor gets of you is you are a high risk client and your chances of you not paying back a very high there by reducing your chances of getting a home loan. The consequence of a negative credit rating is typically a reduction in the likelihood that a lender will approve your home loan application for credit under favorable terms, if at all.

Interest rates on home loans are significantly affected by credit score and credit history; the higher the credit rating, lower the interest while the lower the credit rating, the higher the interest. The increased interest is used to offset the higher rate of default within the low credit rating group of individuals.

Then next thing is affordability, know how much you qualify for.

Unfortunately banks no longer do pre qualification on home loans but that does not mean you won’t be able to beforehand. Apply here for an affordability qualification for you. and we will take you through the process of your personal home loan application.

L your mortgage consultants.....