NEDBANK - A GREAT Balancing Act - to get a Home Loan!!!!

Well I am impressed when I hear a  credit manager tell me what is needed to get a home loan - open policy - nice to see Nedbank .

Three pillars of strength needed folks - thats all so YOU WANT A HOME LOAN then -

RISK - You need to make the bank feel that all the risk is not only on their shoulders but also on yours.  So what do you need for this - A deposit reduces the banks risk and adds yours into the pot, so start saving.  Be a smart finance manager, so manage your accounts and VERY VERY important PAY YOUR ACCOUNTS ON TIME or in ADVANCE.  Never pay late.  Nedbank, like most banks have an internally risk rating of you as a client, so contact your Mortgage Broker and get your risk rating in advance, THEN apply for a mortgage only.

SECURITY - Well no one wants to be left hanging and neither do the banks and this is not particular for Nedbank only.  So make sure what you buy is acceptable for the banks to finance.  If a sectional title flat or apartment get the body corporate financials and make sure the body corporate is in the black (positive cash flow), not to many arrears and outstanding levies, and up to date paid insurance.  Then the bank will feel comfortable as well.  If you have just started a job, make sure you supply your job contract together with a payslip.  Its all about feeling secure. 

Ask your broker.

AFFORDABILITY  - If you want to be declined then dont justify what you can afford.  Remember 30% of your income is the MAXIMUM that the banks will allow you to spend on your home loan.  THATS IT!

DO NOT INFLATE YOUR SALARY AND INCOME! OR DEFLATE YOUR EXPENSES! If it is unrealistic the banks will automatically add an additional 25% to your expenses and once declined on affordability it is very difficult to convince credit managers otherwise.  IT IS TO PROTECT YOU afterall!!!!!!  Ask your mortgage advisor to assist you before you have a bash yourself.

Lovely, easy and A GREAT BALANCING ACT!

Are banks charging you more than they need to with bank charges?

DID YOU KNOW?

Bank charges make up 40 % or more of the banks revenues!

Where else in the world does an entry level employee pay more in bank charges than he does in tax?

An average person earning R2800.00 per month will pay 4 % of his income in bank charges per month. Can banks even explain what we are paying for. No explanation? Nobody I've have spoken to knows exactly what they're paying for in bank transactions because of the way banks reflect their charges and the way they structure their packages. Over and above this, are there hidden costs that we are not aware of?

In the US, it is so easy to open a bank account, and even better there are no charges involved. You receive FREE atm withdrawals, limited number of cheques, electronic funds-transfer payments, and Internet banking. Amazing!

In South Africa the average individual pays +/- R1800 on charges per annum on a normal current account. Take penalty fees for example, why are these so high? If you have an unpaid on your account due to whatever reason, you end up paying astronomical fees for this, e.g +/- R130,00. This is ridiculous as you go even further into debt. I think that these fees should be cut and rated on how well you conduct your account.

If for example you run a very good account and then suddenly have an unpaid, there should be a good reason for this and you should not be penalised. But if you have constant unpaids then they should look into this and charge you accordingly.

Lets look at Pensioners and students. These fees are beyond ridiculous, they earn peanuts as it is, why take their few pennies? I think that the banks should if they need to charge a fee for these clients, why not charge them a flat fee.

Banks claim to beware of these problems, but are they really?

Here are a few packages offered by the 4 major banks!




Silver Package:

Gross annual income (R60 000 / R120 000) - Monthly cost R99 for 25 transactions - thereafter R10 per transaction.

Gold Package:

Gross annual income (R120 000 / R300 000) - Monthly cost R139 for 35 transactions - thereafter R10 per transaction.

These packages include cash withdrawals, account payments, debit orders, electronic fund transfers etc, and only apply to Absa ATM's.

For more info you can contact your nearest Absa branch.





Silver Package: Monthly income of R60 000 or more
Gold Package: Monthly income of R140 000 or more
Platinum Package: Monthly income of R350 000 or more

Fee Manager option:

Option 1: R45 for up to 6 transactions, thereafter R9 per transaction.
Option 2: R85 for up to 12 transactions, thereafter R8 per transaction.
Option 3: R135 for up to 20 transactions, thereafter R7 per transaction.

These cover all standard transactions such as debit orders, cheques etc. and excluding mini statements, penalty fees or transactions done within the branch.

Electronic Service option:

Mandatory monthly fee of R10- plus charges capped at R75 a month.

This includes transactions as such balance inquires(electronic) prepaid purchases(electronic)etc.

Fees are capped at R75, total monthly charge for electronic transactions will be the lesser of the fees for transactions or R75.
This option does not include withdrawals from other banks only FNB, penalty fees, payments(cheques, branches, bank cheque) etc.

For more info contact your nearest FNB branch.





Everyday Account

Gross annual income R36 000 or more

Cost : R85,00 or R55,00 (if client has a Nedbank credit card and home loan paid by debit order)

This include the following: Annual cheque and garage card fees, debit orders, all statements, cheque books etc.

One free cash deposit a month, (ATM / Branch) thereafter R1,10 per R100,00 or part thereof.
One free cash withdrawal a month, (Branch) thereafter R1,10 per R100,00 or part thereof, minimum R16,00.
Four free Nedbank ATM withdrawals a month, then R7,00 a withdrawal.

This option does not include transactions from other banks, cheques issued, penalty fees.






Everyday Account

Same option as above except that this package will cost you R42 000 annually.

For more info you can contact your nearest Nedbank or Old Mutual branch.





Achiever

Gross annual income R36 000 or more

Cost: R110

Includes: 10 cheques, 8 Std bank cash withdrawals, 3 branch withdrawals, 2 ATM cash deposits, 20 electronic transactions (debit orders, stop orders, electronic inter-account transfers, account payments) 20 Mastercard cheque card purchases, unlimited balance inquires, mini statements and prepaid top-ups via electronic channels. Annual cheque card fee and Internet banking subscription fee.

This excludes any transactions from other banks and all other fees not listed above.

For more info contact your nearest Standard bank branch.

As the country's major banks announce their revised bank charges for the new year, it is a good time to re-evaluate how much you pay in on bank charges per month and where you can get the most value for your money, and of course the best service.

The key to choosing the best option for yourself lies in whether you will exceed the set number of transactions and, if so what the cost of the additional transactions will be and whether you will need to do other transactions that are not available in the specific package and what the additional cost will be thereafter.

Also remember that if a package fee includes you having a home loan with that specific bank you need to weigh up the pros and con's of saving a few rand on the packages they offer you or taking up another banks package, spending a bit more on bank charges, but saving more on your home loan.

So Remember it is up to you to make your money work for you.

TOWARDS A FREE AND EQUAL ECONOMY FOR ALL!

Some Good reference sites for this artcile are:

Bankmonitor South Africa
Bank Comparison Site