Banks have good news for buyers

Back in the pre-2007 property heydays it was quite easy to obtain a home loan at favourable rates – even as a first time buyer. Since then it’s been tough going with our local banks increasing their scrutiny of applicants, tightening their lending procedures and offering fewer, smaller home loans. Based on new data released from home loan originator BetterBond it seems that this situation is changing with the latest bank policies painting a rosier picture.

The banks are willing to lend

“It’s certainly been harder for buyers to obtain home loans over the past few years and we’re very excited to see that the banks are starting to ease up on their lending policies”, says Bruce Swain, MD of Leapfrog Property Group, “we need their support to boost the market that’s been struggling in recent times”.

Standard Bank

Employed Standard Bank clients can now get:

• a new 100% loan on a property of up to R3.5 million and an 80% loan on properties over that price (the loan term ranging up to 30 years) while
• non-Standard Bank clients could get a 100% loan on properties up R1.5m, 90% for properties between R1.5 and R2.5 million
• and an 80% loan on real estate selling for R2.5 million or higher over the same period.

In what will surely be good news for many the loan terms for new, self-employed existing Standard Bank clients, as well as non clients, are the same as for employed clients.

ABSA

Employed ABSA clients can apply for

• up to a 100% loan for a property of R2 million or less,
• up to 90% on a property valued at over R2 million and,
• up to 85% on a purchase price over R3 million. The terms remain the same for non-ABSA clients except for a purchase price of R3 million or more in which case they can apply for a loan of up to 75%.

Self-employed clients (both ABSA and non-ABSA clients) can apply for loans of up to 85% on a purchase price less than R3 million and 75% should the price be R3 million or more.  All loans have a maximum term of 30 years.

First National Bank

At FNB the same terms apply for salaried FNB and non-FNB transactional clients with a maximum loan term of 20 years. Applicants can apply for

• 100% loans for properties with a purchase price of R2,5 million or less,
• 95% loans for prices between R2.5  - R3 million and 90% loans on R 3 million purchase prices or higher.

Self-employed buyers can apply for loans up to 95% on properties priced at R3 million or less while 90% loans are available for purchase prices over R3 million.

Nedbank            

Nedbank does not consider non-Nebank clients but offer the following loans to clients up to a term of 25 years.

• A 90-100% loan on a purchase price of R1.5 million or less,
• A loan of 90% up to R3 million or,
• 80% over R3 million.

Self-employed clients with a primary business relationship with Nedbank will also be considered.

Buyer Advice

 “While it may now be easier to obtain a home loan, and we certainly encourage people to invest in residential property, I would like to caution potential buyers to take all the additional costs into account as well; from the transfer duty to the monthly municipal rates it is important to ensure that they will be able to afford the property they’re interested in long term”, warns Swain.