HomeLoan Tips
There is mounting evidence that even South Africa is not immune to the current credit crisis that is affecting the entire globe. It should be mentioned first that home prices are continually dropping. Statistics that were releases by bond originator ooba state that the home prices have fallen 6.6 percent overall compared to last October. Broken down into simple terms, it basically means that a house that is sold last year would have brought R803,908, would only bring in R751,118 in October of this year.
Banks are being cautious in light of the credit crisis, the National Credit Act and deteriorating economic outlook. Though the rate of home loan declines were down slightly, 1.4 percent, it doesn't really dent last month's rate of 51 percent.The second indication of the poor property market is that potential homeowners are finding it increasingly difficult to get financing for their properties.
In the third quarter of this year alone, the number of loans more than two months behind rose 21.5%.Another reason for banks to tighten their lending is the rising number of homeowners who are late on their installments.
What choices does a potential homeowner have in today's market? Remember that decline rates are different for each individual bank, so take the time and before giving up, try applying with other banks.
Another must, a sound credit rating. It is no longer enough to have a steady paycheck. Home loan applicants must be able to prove that you can make your installment payments and that you have not been late or defaulted on any other payments for at least two years before making your home loan application.
Potential lenders want their patrons to be stable borrowers, with a solid history of debt payment. If you have this quality, it will be extremely helpful in your pursuit of a home loan.
If your history is not stellar, it is best to be honest. Lenders appreciate a borrower who is upfront about a rough spot in his credit history instead of trying to cover it up. Also, show that you are serious about your financial obligations by opening savings account for the express purpose of building a home deposit fund. The average deposit requirement is 10 percent, but this can vary from bank to bank, so do your research.
The maximum your monthly installment should be is 30% of your total income, and it is better if it is less. Banks won't give you a second look if you don't meet this prerequisite.
On the one hand, sellers are having a difficult time finding buyers and are being forced to accept lower offers, which is great news for buyers. On the other hand, potential buyers are struggling to secure financing. All in all, today's property market is fraught with frustration.
If you are able to handle the payments and have a steady, sufficient source of income, you should exhaust every option when it comes to getting a home loan.
Banks are being cautious in light of the credit crisis, the National Credit Act and deteriorating economic outlook. Though the rate of home loan declines were down slightly, 1.4 percent, it doesn't really dent last month's rate of 51 percent.The second indication of the poor property market is that potential homeowners are finding it increasingly difficult to get financing for their properties.
In the third quarter of this year alone, the number of loans more than two months behind rose 21.5%.Another reason for banks to tighten their lending is the rising number of homeowners who are late on their installments.
What choices does a potential homeowner have in today's market? Remember that decline rates are different for each individual bank, so take the time and before giving up, try applying with other banks.
Another must, a sound credit rating. It is no longer enough to have a steady paycheck. Home loan applicants must be able to prove that you can make your installment payments and that you have not been late or defaulted on any other payments for at least two years before making your home loan application.
Potential lenders want their patrons to be stable borrowers, with a solid history of debt payment. If you have this quality, it will be extremely helpful in your pursuit of a home loan.
If your history is not stellar, it is best to be honest. Lenders appreciate a borrower who is upfront about a rough spot in his credit history instead of trying to cover it up. Also, show that you are serious about your financial obligations by opening savings account for the express purpose of building a home deposit fund. The average deposit requirement is 10 percent, but this can vary from bank to bank, so do your research.
The maximum your monthly installment should be is 30% of your total income, and it is better if it is less. Banks won't give you a second look if you don't meet this prerequisite.
On the one hand, sellers are having a difficult time finding buyers and are being forced to accept lower offers, which is great news for buyers. On the other hand, potential buyers are struggling to secure financing. All in all, today's property market is fraught with frustration.
If you are able to handle the payments and have a steady, sufficient source of income, you should exhaust every option when it comes to getting a home loan.
About the Author:
Tom Martens is the content coordinator for South Arica's leading Homeloans portal which amongst others offers origination services for ABSA home loans
posted by Debt Consolidation Loan at
8:53 AM
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