So my first approach was with an external private lending company whose calculator model produced the below results which gives me a very clear indication as a starter of where things are: - Not attached but it means NO GO they do not want to carry the risk.
We call this the ASSISTANT LOAN and it is important to know that when you apply here this is not the cheapest loan at a rate of 17.5% but it is a decent offer in the debt consolidation approach and often the quickest to get all situations on the road and the idea here is to simply get the funds to kill the credit cards etc and this loan is usually taken and after a year they then assist you back into the big banks fold via a standard mortgage.
Unfortunately, this type of loan criteria is not met as the value of the property vs the loan vs the income needs to make up a minimum of R 150,000 in their loan book before they take on the risk. So I attach this for you just for your records. Use it or lose it!
PROPERTY VALUE - This Lightstone valuation I sent you is what some of the banks use especially FNB, the others usually send out a valuer. So we can assume a value of between Lightstone (R 700,000) and your recent one of R 1,500,000.00.
FNB - I agree FNB will decline, they have the loans from you, they know your risk and they have their internal risk ratings as well, you are highly exposed to them and my suggestion is that even though they are an awesome bank, let’s forget about them for now until things are sorted out
SWITCHING to ANOTHER BANK - Not an easy option especially with the lending banks being as cautious as they are now. Also when the banks switch they will normally only offer a maximum of 80% of the value they find. So if we assume a value of R 1,5 m then we can expect an offer of R 1,200,000 and this is what you owe as it is, plus there are some costs and expenses in switching – so close this avenue for now.
Buying a NEW HOUSE - OK, attached is a copy of your credit report and as you are aware there are some issue here that will prevent a new loan. Whether you use us, a bank or another mortgage originator or bond originator it remains the same as we all work through the same credit management at the banks. Whether it is standard bank, FNB, ABSA, Nedbank.
Even with these been settled, they are still on the credit reports and they are bank adverse’(FNB) – so that closes the door almost 100% - this scares the banks more than anything. This includes getting personal loans (However i could be wrong, but this defeats the purpose as these are expensive.
You have to make arrangements to get these removed and I would speak with Transunion ITC on 0122 2146000 and Experien on 011 7993400 find out how to get these removed. So this closes this door as well until this is cleared up.
THE WAY FORWARD: -
1. I see you were paid a bonus – use this to kill some of your credit cards today, tear them up and move forward. They will and do cripple you financially no matter what you do. The credit card interest rates are prohibitive.
2. If this is not possible then you need to: Kill one of the cards off immediately or over the next month or so and close it forever.
3. Increase your bond payments by R 200 pm and after 2 months ask FNB to extend your bond from 20 to 30 years and ask for a better rate.
In three months time then you can look at this again, but right now you need to address your credit record first and that will take at least a month or so. Then I suggest we re look at this. I wish I could have been more helpful but unfortunately in this credit climate lending is tight and any form of credit risk scares the lenders 100%
I am thinking of you!!!!!
9 comments:
A problem like this is unavoidable. Sometimes the crises just occur on the time which you are not prepared. So it must have been in the situation that you were too prepared on the case of emergency.
This was a really quality post. Buying a home right now would depend on a few things... With home prices falling now may be a good time to get in the market, then as the economy improves, depending on what you buy, your home's value should go up thus making you a profit should you decide to sell later. When buying a home that would look great on your credit report and as reported on the news the only ones who are getting credit awarded to them are those with good credit scores. If it were me I would pay off debt first because when you get into you new home you still may need to make major purchases like furniture and home decor that may require credit. thanks for sharing this informative post.
Killing the credit cards is always a good idea. However, it's always a good idea to keep one credit card to help you maintain a good credit score. Each and every payment you make gets recorded by the credit bureau. So it does assist in further loan applications. Only works if you're disciplined though!
@waytowealthguy
Couldn't agree with you more. It's all about responsible credit pratcies isn't it?
Some of "us" can do it! Others need assistance. It's a little like gambling. Winners know when to stop using their credit cards.
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