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.

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!!!

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


Property use: PRIMARY / MAIN RESIDENCE


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?

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.....