ABSA Bank Home Loans

Whether individuals want to buy or build a new home, make improvements on their current home or simply want to invest in another property, then ABSA home loans is the right decision for you.
ABSA will provide individuals with a variety of home loan financing solutions in order to suit the various needs of customers. Included in this is the option to pay your home loan over a longer term of 30 years instead of the normal 20 years.

Individuals may also choose between fixed or variable interest rates where the former will ensure owners repay a fixed amount and the latter simply means that monthly installments will increase or decrease with the inflation rate.

Other than the above, ABSA home loans also offer clients a Flexiserve or re-advance option on their ABSA home loan. Flexiserve home loans simply means that any additional funds paid into the home loan will be made available immediately should the individual require additional funds. A re-advance option is also available and simply means that individuals may borrow the difference between the original loan amount and which has already been paid off.

The Further Advance home loan solution allows individuals to borrow money to the value of the property. This simply means that should the market value of the property increase beyond the loan amount originally paid for it, then individuals may borrow the difference up to the new market value of the property.

Another unique ABSA home loan financing solution includes the MultiPlan option which that a home loan account can be structured into a primary and one or more secondary accounts. The primary account is the original home loan granted to individuals whilst the secondary accounts can be utilized when applying for a new home loan, ReAdvance or FurtherAdvance account.

The secondary accounts can have their own repayment terms, Statements, interest rates and FlexiServe facility.

Insurance in the form of a home loan protection life insurance policy forms part of the ABSA home loan solutions, and will ensure that your bond amount is settled in the unforeseen event of death, disability or dread disease.

Home loan comprehensive cover is available to insure to property against any structural damages while the One-call home solution will ensure better prices and a more pleasurable experience should the home owner move.

An ABSA home buyer’s guide can advise individuals on everything they need to know about buying or selling properties. It consists of six topics namely calculate, locate, make an offer, application, register and moving in.

Individuals can use the  home loan calculator to determine what loan amount they could qualify for, what the monthly repayment amount will be and how different cost, fees and deposits could influence your installment and repayment term. This can be done by simply logging on to the Mortgage Plus website and choosing one of the different options available in the comfort of your own home.

Interested individuals who wish to find out more about ABSA home loans should enquire below.

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

Do you have a wish list of extensions, alterations or renovations to your home? We may have mental notes for such work, but few of us have considered the nitty-gritty of financing it.

In fact, a smart approach to home upgrades means the work can be relatively painless and even pay for itself if the property is suitably enhanced.

Funeka Ntombela, director of home loans at Standard Bank, said deciding how to finance renovations was the most important but frequently least considered part of the process.

“Renovations are done either out of necessity – like another baby on the way or a cottage for family – or a desire to improve quality of life, such as a new kitchen, moving the bathroom, adding a family room. Getting the best of both worlds – a great renovation that you can afford to pay for – needs detailed planning. We have to balance what we want with what we can afford. Hitting that reality later on in the renovation process can potentially cost people the very home they were trying to improve,” Ntombela said.

She warned that borrowing to fund renovations meant having to pay back the loan – irrespective of whether the renovation added value to the house or was a disaster.

“It is essential to bear in mind that whatever kind of loan you use, the bank will not have an opinion on whether you got value for money or whether you could not finish the job because the amount you borrowed was not enough to cover the inevitable cost overruns.

“Perhaps, more than any other financial commitment, renovating requires you to build into your planning the risks and likelihood that the job will end up costing more than you imagined,” Ntombela said.

“It is also advisable to build up and contribute some of your own savings to a renovation project, much like a deposit on other kinds of purchase. Your savings should be able to pay for some portion of the capital cost of the renovation. Showing the bank that you are contributing some savings will also help your loan application.”

She said an access bond was probably the quickest and easiest way to fund a renovation. “You will not have to explain what you are withdrawing the funds for, so the onus is very much on the homeowner to ensure that their planning is good and that the service providers deliver.”

Another option is what banks call a “further advance”. “This means that if the property is now worth substantially more than your existing bond, you can apply for a further advance. The amount would be added to your existing bond. The usual credit and affordability criteria would apply,” she said.

Two other options were to apply for a medium-term loan or a pension-backed loan. “A medium-term loan is an unsecured facility that banks may grant to certain kinds of customers with the right profile and history with the bank. A pension-backed loan is where your employer agrees to allow your pension fund to be used as security for a loan. The amount you can borrow will depend on how much you have built up in your pension fund,” said Ntombela.

Jacques du Toit, sectoral analyst at Absa Retail Bank, said using mortgage loans made the most sense. “It can be paid off over the longer term of the bond, rather than the short-term loan scenario. Loans are also usually granted at higher interest rates.

“With many bonds you have direct access, although you may have to reapply for further credit. If you have put cash amounts into your bond over and above your scheduled payments, you should be able to get that cash back for the extension work. Also, remember that it is difficult to take on more debt and loans, which again suggests using an access bond would be better.”

Pat Lamont, Nedbank Home Loans GM: sales and customer relations, said customers had two choices: a further loan with registration or one without registration.

“A further loan with registration allows the borrower to use his or her existing asset to raise funds for a variety of uses. The additional loan is secured by a second bond registered over the property, which has either increased in value since the original loan was granted or had surplus value at the time of original registration, or if the loan is being taken to improve the property,” Lamont said.

“However, all credit criteria in terms of repayment ratios and lending limits must still be met; that further bond must have preference over any third-party bond registered against the property; and homeowners’ insurance and life assurance may have to be increased if a bigger loan is taken.”

Lamont said minimum loan amounts of R30000 would typically be considered by the bank, with a maximum repayment term of 240 months. A registration fee on the additional amount was payable to the conveyancer, as well as an initiation fee as prescribed by the National Credit Act.

“The second option – a further loan without registration, otherwise known as a re-advance – can be offered to existing home loan clients who want access to capital already paid into the loan,” Lamont said. Clients with a history of making repayments could get the difference between the original bond amount and the current balance. “Minimum amounts of R15000 will be considered, with a maximum up to the original loan amount … repayments can be adjusted to suit the customer’s ability to repay and there are no additional registration costs,” Lamont said.

Mortgage Plus offers a wide range of advice on different bond options and further advice on the above. Please call us for further information on:

Complete this short form online

Call us on 011.327.4489

Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za