Banks lent even less money to people wanting to buy a home in February and statistics show that mortgage advances declined from 3,8% in January to just 3,4% in February according to data released by the South African Reserve Bank.

Outstanding mortgage balances in the household sector increased by 4,1% year-on-year in February after rising 4,6% in January. On a monthly basis, household mortgage balances were up by R2,8-billion in February compared with the previous month.

According to Jacques du Toit, senior property analyst at Absa Home Loans, the declining trend in mortgage advances is believed to be related to various factors including the ratio of household debt to disposable income that was at 77,6% at the end of last year.

“The percentage of credit-active consumers with impaired credit ratings remained high at 46,5%, in the final quarter of 2010 and this situation impacts on the consumers’ ability to take up credit against the background of the National Credit Act. Moreover, the banks’ lending criteria remained strict,” says Du Toit.

He says that significant increases in the fuel price and rising food inflation are also having an impact on consumers emphasised by the fact that consumer confidence had fallen in the first quarter of this year.

Total mortgage advance reach R1 047,6-billion in February this year, while mortgage advances to households at the end of February were at R764,2-billion equivalent to 73% of the total.

Du Toit says that mortgage advances growth is forecast to remain in single digits for the rest of this year.

“The cost of servicing household mortgage debt as a percentage of disposable income was around 4,3% in the last quarter of 2010. This was the net result of trends in growth of household mortgage debt – that increased by 0,9% during the period – and a lower mortgage interest rate,” says Du Toit.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

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Getting pre-qualified and approved at Mortgage Plus

Before you put in an Offer to Purchase, this is the very first thing you should do – get yourself pre-qualified for a bond.

Getting yourself pre-qualified before putting in an Offer to Purchase should be the first step you take. The National Credit Act stipulates that monthly deductions, e.g. income tax, monthly living expenses and debt need to be taken into account. Your level of debt can affect the amount for which you qualify. It is advisable that you provide your Mortgage Plus home finance expert with an accurate summary of your monthly expenditure so your pre-qualification amount can be determined. Your Mortgage Plus home finance expert will formulate your pre-qualification amount and issue you with a certificate. This enables you to provide an estate agent with a pre-qualification certificate that has been calculated according to the National Credit Act requirements.


Your pre-qualification is valid for 90 days. After 90 days your Mortgage Plus home finance expert will contact you to check whether your expenses have changed over this period. If there has been a material change, the pre- qualification will be recalculated and revalidated. If there is no material change to either income or expenditure, Mortgage Plus will reissue a revalidated certificate.

Quotation

Once the banks have assessed your home loan application, and if the application is successful, the bank will issue a Quotation which will include interest rate, cost of credit, any special conditions that may apply, etc. Your Mortgage Plus home finance expert will discuss this and other bank quotations with you. Once you agree on a Quotation, Mortgage Plus will notify the relevant bank, who in turn will proceed to instruct the attorney appointed to register the mortgage bond.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online

Call us on 011.327.4489

Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za