Followin on my previous article (Absa Home Loans), I thought I'd share a little more light into Absa's credit lending policy changes.
ABSA have announced that with effect from Monday, 12 May 2008, the following maximum permissible Loan to Value ratio’s will apply:
R0 – R800 000 : Maximum LTV = 100%
R800 000 – R2.7m: Maximum LTV = 95%
R2.7m – R4m: Maximum LTV = 90%
R4m: Maximum LTV = 85%
Vacant Land (irrespective of Loan Amount): Maximum LTV =75%
In circumstances where the applicant is able to cede suitable collateral security to the bond, thereby reducing the risk to the relevant maximum permissible level, ABSA may consider approving a higher loan amount.
ABSA will not entertain any cost inclusive loans, i.e. where the risk will exceed the above maximum LTV’s, with the exception of ABSA’s My Home product, where cost inclusive loans to qualifying applicants will still be considered.
Applications which are in excess of the above permissible LTV levels will not be submitted to ABSA.
4 comments:
OH MY GOSH I FEEL FOR AGENTS SELLING THE HIGHER PRICED PROPERTIES AS I AM SURE THE OTHER BANKS WILL FOLLOW THE SAME GUIDE LINES SOON. What do you think Wizard.
Well funny you should mention that. Along with ABSA news came in this morning that Sanlam have changed their credit lending policies too. Same policies as ABSA. Not sure if they're underwritten by ABSA at all but as far as I know not.
Couldn't agree with you more though. I think the upper crust of the real estate market is going to take a good knock, bring the average house price down and most likely bringing you R400 000 - R800 000 properties back in full swing.
However, I think now is the time to buy. I think if people don't get into South Africa property within the next 18 - 24 months, it'll be the last time. Property is going to BOOM ater 2010 and it's going to become like the rest of the world.
Just my thoughts.
I wonder if all the other banks will follow?
Hello Yes2Property,
Was acutally going to put another articles together but I'll reply to your question.
According to our sources at NEdbank and Std Bank the banks are not planning on following course.
The reason ABSA bank have done this is because of their partnership with Barlcays Bank and Barclays have the same nding practices worldwide. This is the same reason Sanlam have followed suit as they're underwritten by ABSA as well.
Not sure about FNB but looks like it's just ABSA for now.
Post a Comment