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News

A surprising number of home loans are being approved at 100 percent of the property price, according to the latest statistics from mortgage originator – Mortgage Plus Bond Originators, but this does not necessarily reveal a slackening of credit qualification criteria on the part of lenders.

These figures show that although most home loan applicants are still required to have a deposit of between 10 percent and 40 percent, depending on the type of property they want to buy, almost one in every five (18 percent) of the loan applications processed by Mortgage Plus Bond Originators is now being approved for a 100 percent loan.

In addition to this, says Mortgage Plus Bond Originators, 13.5 percent of applicants are obtaining loans for up to 104 percent of the property’s value through the special first-time buyers’ packages being offered by some banks on affordable houses.

“This means that more people can get a foothold on the property market ladder at a time when interest rates and prices are low. In the case of first- time buyers, the loans sometimes even include transfer and bond registration costs that would otherwise have to be paid in cash.

“And we should not forget that many people who are buying through the banks’ assisted sales programmes for financially distressed homeowners are also able to access 100 percent bonds as well as a 50 percent reduction in transfer costs.”

However, he says, what is most significant about the increase in the number of 100 percent loans is that it indicates an increase in the number of potential borrowers with sound credit records.

“The banks are not reluctant to grant 100 percent bonds, but they do have to impose strict conditions and follow stringent guidelines in terms of the National Credit Act. The fact that more homebuyers are able to access 100 percent finance is a good indication that the financial position of households is steadily improving as people pay down their debts and get their finances under control.”

Mortgage Plus does caution, though, that there are seldom any rate concessions on 100 percent loans, whereas borrowers who are able to pay a deposit of 10 percent or more may well be able to negotiate lower interest rates, especially if they have good credit histories and apply through an originator.

“There are also other advantages to paying a deposit, including interest rate savings over the life of the loan and protection against interest rate increases and negative equity, so overall we do believe it is a better course of action for potential buyers to save for deposits before buying.”

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

www.mortgagepluscc.co.za

Mortgages – Looking for the Best Mortgage

You’ll want to compare all the costs involved in obtaining a mortgage. Shopping, comparing, and negotiating may save you thousands of rands.

Obtain Information from Several Lenders all at once through Mortgage Plus

Home loans are available from several commercial banks and mortgage companies. Different lenders may quote you different prices, so you should contact several lenders to make sure you’re getting the best price. You can also get a home loan through a mortgage broker.

Brokers arrange transactions rather than lending money directly; in other words, they find a lender for you. A broker’s access to several lenders can mean a wider selection of loan products and terms from which you can choose. Brokers will generally contact several lenders regarding your application.

Be sure to get information about mortgages from several lenders or your mortgage broker. Know how much deposit you can afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest rate is not enough.

Ask for information about the same loan amount, loan term, and type of loan so that you can compare the information.

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

www.mortgagepluscc.co.za