According to statistics released by bond originator ooba, home prices have fallen 6.6 percent overall compared to October last year. In real terms, that means the averaged home priced at R803,908 last October would only be able to sell for R751,118 in October of this year.The evidence is showing in a couple of ways, and South Africa is not immune to the current global credit crisis.
The second indication of the poor property market is that potential homeowners are finding it increasingly difficult to get financing for their properties. 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.
Another reason for banks to tighten their lending is the rising number of homeowners who are late on their installments. In the third quarter of this year alone, the number of loans more than two months behind rose 21.5%.
What is a potential homeowner to do in this market? It is important to note that decline rates vary from one bank to another, so take the time to try applying with other banks before you give up completely.
Obtaining a home loan is not what it used to be. Simply having a steady job will not qualify you. It is essential that you have a positive credit rating. Lenders require that an applicant be able to prove their ability to make the required payments. Be sure that you have not defaulted on any other payments in the previous two years before submitting an application for a home loan.
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.
Make sure your monthly installment is no more than 30 percent of your monthly income. Less is preferable. Banks will not consider your application if the installment does not meet this requirement.
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.
As a potential buyer, it is really worth your while to explore every avenue to get a home loan as long as you can afford the payments and your job is stable enough to allow the commitment. - 16752
The second indication of the poor property market is that potential homeowners are finding it increasingly difficult to get financing for their properties. 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.
Another reason for banks to tighten their lending is the rising number of homeowners who are late on their installments. In the third quarter of this year alone, the number of loans more than two months behind rose 21.5%.
What is a potential homeowner to do in this market? It is important to note that decline rates vary from one bank to another, so take the time to try applying with other banks before you give up completely.
Obtaining a home loan is not what it used to be. Simply having a steady job will not qualify you. It is essential that you have a positive credit rating. Lenders require that an applicant be able to prove their ability to make the required payments. Be sure that you have not defaulted on any other payments in the previous two years before submitting an application for a home loan.
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.
Make sure your monthly installment is no more than 30 percent of your monthly income. Less is preferable. Banks will not consider your application if the installment does not meet this requirement.
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.
As a potential buyer, it is really worth your while to explore every avenue to get a home loan as long as you can afford the payments and your job is stable enough to allow the commitment. - 16752
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
