Fixed Rate Options From ABSA Home Loans
In Nov 2007, when it seemed that interest rates had already peaked, ABSA home loans launched a campaign offering homeowners the chance to Fix their Home Loan Interest Rate at 11.75% - 2.25% below prime at the time.
It seems the bank was a bit hasty in launching that campaign as rate hikes have not stopped.
ABSA homes loan have as a result revised its Fixed Rate Options:

• The Maximum Fixed Rate Term is still 10 years
• The Shortest term is 1 year
• The Best Rates of 1% below prime are reserved for loans that are less than 80% of the total value of your property

Applicable to loans where the Loan to Value is Less then 80.00%

Applicable to loans where the Loan to Value is Greater or equal to 80.00%

Note these rates are subject to change, and are correct at the time of writing.

Use this Mortgage Bond Calculator to calculate your Bond Savings.

Today’s Mortgage and Property News: The Mortgage Crunch

Property Prices are set to drop by a massive 40% this year, according to Lew Geffen - head of Sotherby’s International.
In an internal memo - released to the media with week - Geffen advises his agents to encourage sellers to drop asking prices by 25% immediately.

Geffen predicts that the property market could tumble this year, saying “Today’s low offer is tomorrow’s miracle price”.
And he states that the fact that Banks are tightening their lending criteria and asking for large deposits, will signal a dramatic slow down in the market.

Meanwhile, the Alliance Group predicts that as much as 8000 people could lose their houses amid signs that debt levels, particularly in the middle income group, are rising rapidly. The auction company says that mortgage stress was spreading across all cities and income groups.

Alliance CE Rael Levitt said next week’s expected interest rate hike would simply worsen the financial crisis facing many families that were already battling with spiraling food and fuel prices. The greatest distress levels were seen by home owners with houses in the R2m-R5m range and less in the lower-end price range below R500000.

Home Loan News and Tips: Banks offer Home Loan advice during tough times

The current climate of high interest rates, and rising food and petrol prices is driving up the average cost of living in South Africa.
In response to this the four major Banks – ABSA, Standard, FNB and Nedbank – have come out unanimously agreeing that homeowners should look to consolidate debts into one low interest account.

The easiest way to lower your monthly expenses is to consolidate all your high interest [short term] debts such as Personal Loans, Credit Cards and Car Loans into one low interest account – your homeloan.

Gavin Opperman of ABSA Home Loans says: “Consolidating debt into a single loan provides our customers with a single, affordable debt repayment on a monthly basis.”

The interest charged on your Home Loan account is about 13.5%, far less than your credit cards which is often as high as 23%.

[If your home loan interest rate is not 13.5% or lower – click here to get a better rate]

The other advantage that debt consolidation offers is an Extended Loan Term, which lowers your total month expenses. Although you’ll be increasing your monthly cash flow, extending the loan term would mean paying more interest.

Speaking to the Sunday Times, Standard Bank Home Loans product director Shaheen Adam said although debt consolidation made sense, ideally consumers needed to be frugal with their expenditures and should try to pay off short- term debt such as credit card repayments sooner, even after consolidation, to benefit from lower interest rates.

John Loos of FNB Home Loans said FNB agreed that extending short-term debt into a longer term was not always good, but current economic conditions necessitated people looking into the consolidating option.

And, Nedbank Home Loans have setup a debt counselling department to assist with credit restructuring occurs and make debt more affordable to their clients.

Get something back from your Bank, and add-value to your property

With all the negative news surrounding rising interest rates and the banks’ tougher lending policies, here is some good news about a bank that is giving something back to its home loan clients.

Through their recently launched Bright Ideas campaign, ABSA home loans are giving their clients a 10% discount on a range of energy saving products.

We are reminded that South Africa is trying to overcome a major electrical crisis. To do this we only need to reduce our electricity usage by at least 10%.

SA’s largest mortgage provider is encouraging homeowners to use their Access Bond facilities to add value to their homes by making it more energy efficient and eco-friendly.

Energy Saving Solutions
Solar heating panels draw power from the sun’s rays and convert it into electrical energy, which is used to heat up your geyser.
Proper geyser insulation helps to contain the heat in your geyser by reducing the amount of heat that is radiated from the cylinder.

Although the campaign has been aimed at home owners, the special 10% discount on solar water heating, insulation, Uninterruptible Power Supplies (UPS) and generators will also be welcomed by many small businesses.

Mortgage SA Home Loan News:

South African Home Loan providers have responded to the current high interest rate climate and slow property market by tightening their mortgage lending criteria. FNB and ABSA home loans have lowered their Loan-to-Value limits from 108% to a maximum of 100%.

108% home loans were previously used by new home buyers to cover their initial costs, such as transfer and bond costs. Essentially, if the bank valued your new home at R1million they were usually willing to offer you a loan of R1 080 0000 – to cover costs.

Bond Originators:
Since the banks are now less willing to finance the extra costs, the need for Bond Originators has become even more vital. Their service is totally free and your originator is usually able to discount some of the attorney costs while also offering you cash back.

Below are the most recent changes to the banks credit policy:
ABSA Home Loans

• Loans up to R800k - maximum of 100% LTV.
• Loans greater than or equal to R800k but less than R2.7million - maximum of 95% LTV.
• Loans greater than R2.7million but less than R4million – maximum of 90% LTV.
• Loans of R4million or greater – maximum of 85% LTV.

FNB Home Loans

• Maximum LTV of 100% on all bonds - this also applies to the FNB One Account

Mortgage SA Home Loan Tips: All-in-one Mortgages

Although the prime purpose of a mortgage is to finance the purchase of property, a home loan is far more than just a loan for your home. Recent innovations in the bond industry have seen an increase in the flexibility of your bond.

Your bond can now be used as a powerful investment, bad consolidation or savings tool.

With products like the ABSA Multiplan home loan and other types of Access Bonds - from FNB, Nedbank and Standard Bank - you are able to leverage the potential of stored in your mortgage.

Many new homeloan products enable you to make the most of your bond finance by structuring multiple accounts into your low interest mortgage.

Most people these days use their homeloans as a source of finance for far more that just their houses. All-in-one bonds structure your mortgage account so that you are easily able to withdraw funds from your home loan or save extra funds in your bond to lower the interest payments.

The benefit there All-in-one accounts offer are:

• One low-low interest rate for your credit card and personal loan debts
• Easy access to available funds in your account
• A powerfully savings tool
• Longer repayment terms – to lower your monthly expense
• and many more…

nedbank.co.za
Home Loan Competition: Nedbank

Win R50 000, which if it’s paid into your home loan account could save you over R250 000 in interest payments.

Nedbank Home Loans are currently offering you an opportunity to win your share of R350 000. By applying for a Nedbank home loan between 3 may and 31 may, you are automatically entered in to the draw to win one of the seven R50 000 prizes.

(Note: You need to register your bond with Nedbank to be entered into the draw)

With a Nedbank home loan, your R50 000 prize could save you over R250 000 in interest over the term of your loan.
In fact, any additional amounts paid into your home loan can dramatically reduce the amount of interest you pay over the term of your loan.

Competition Closes 31 May 2008
Contact one of our Home Loan Consultant for more information and assistance.
1) Complete this short online form
2) Call: 0861-111-563
3) Email: olen@propertyloans.co.za

Mortgage Tips: SA Home Loans

1. SA Home Loans Interest Rates
   Most home loan providers in South Africa lend money based on the Prime Interest Rate and have been forced to increase their rates due to the consistent rise in prime rates over the past 6 months.

   SA Home Loans (SAHL) is not a bank, they are Home Loan specialists and their lending rates are based on the JIBAR rate (definition). SAHL rates are typically offered at less than the Prime lending rate.

   At the time of writing, the JIBAR base rate was 11.3% while the Prime base rate was 15%

2. Interest Only Home Loans
   SAHL offers one of the most unique home loan products currently available. The interest only bond gives you the choice to pay only the interest portion of your home loan. This is ideal for commission earners or self employed clients, who have an inconsistent income.
   Read more on the SA HOME LOAN INTEREST ONLY bond
3. Flexible Terms
   While the average South African holds their bonds for about 5 years - SAHL does give you the choice to extend the term of your home loan to over 20 years. Most banks limit their home loan terms to a maximum of 20 years.

   A longer term will lower you monthly bond instalment, making it easier to manage your financial commitments during high interest rate cycles.

For more assistance regards these and other options available to your Contact one of our consultants.
Email: Olen@propertyloans.co.za
Ph: 0861 111 563
or Complete This Online Form

Home Loan and Property Tips

With interest rates up and affordability dropping it may seem like the wrong time to begin climbing the property ladder. But, with a bit of know-how and resolve you’ll find that it’s not as difficult as you might think.

Rising Inflation and interest rates have forced many potential buyers and investors out of the property market, which has a knock-on effort for sellers. With fewer buyers in the market sellers are forced to lower their asking prices.

You should be able to find a fair number of great deals at the moment. Keep an eye out for properties that have been on the market for more than 4 or 5 weeks - their prices are usually very negotiable by now.

While it is thought that the National Credit Act (NCA) has stopped many buyers from securing the home loans needed to buy properties , viewed from another perspective – the Act also offers buyers a new method of securing home finance.

Following the implementation of the NCA - some mortgage lenders are basing their home loan qualifying criteria on your total disposable income, and not your gross income. This means that someone [or a couple] earning R15k/pm could potentially qualify for a home loan of R700k, if their total disposable income is able to support the monthly bond repayment of about R8 000.

The current property market can be described as a buyer market and although banks may be stricter with their lending criteria, no leader is going to turn away a client that can display affordability and a clear credit record.

Home Loans News: Virgin Money - Elasti Bond

While we’ve all been focussing on the latest interest rate hike, a slowing property market, and power shortages, Virgin Money has quietly launched its Home Loan Product – The Virgin Money Home Loan.

The Elasti Bond, as its known, is structured much like an Access bond in that it lets you draw money from your home loan when you need extra cash.
This home loan is only available to you if:

• You’re 18 or older (if you’re not, you must be married or emancipated by the court);
• You earn at least R8 600 a month (on your own, or with your partner);
• You want to buy a residential property or move your existing home loan to Virgin Money;
• You have sufficient cash to spend on your bond repayments and pass normal credit checks; and
• You’re an individual, 2 or more people, a Closed Corporation or Trust who decided to buy a property.
• You also need to be a Virgin Money Credit Card Holder.

For more information about Access Bonds complete this ONLINE FORM and a consultant will contact you.
Email olen@propertyloans.co.za
or Call Us on 0861 111 563