select
|

Pay maintenance, or else no home loan

Maintenance defaulters are shortly going to find it much more difficult, if not impossible, to buy property, thanks to proposed amendments to the National Credit Act (NCA) regulations.

That’s the word from Richard Gray, chief executive of Harcourts Real Estate. He says the amendments, which are due to be tabled in Parliament soon, provide for monthly maintenance payments to be added to the list of debt obligations that lenders must include when conducting the affordability assessments that are required before any new credit can be granted.

They also provide for any judgment against a maintenance defaulter to be added to that person’s credit record and to remain there for five years or until it is rescinded by a court.

“Sadly, maintenance defaulting is all too common is SA, where almost half of all children are being raised by single parents, but the Justice Department is really hoping that these amendments will help change this situation,” he says.

“And we certainly anticipate that they will make it extremely difficult for anyone who is not meeting their maintenance obligations to their children to then just go and obtain finance to buy themselves a new home or investment property.”

Currently, Gray explains, the NCA already stipulates that any bank considering a home loan application must first establish what the potential borrower’s income is, what his or her regular monthly expenses are, and what debt repayment obligations he or she already has judging by any credit agreements listed by the credit bureaux.

“It also sets out very stiff penalties for anything perceived to be ‘reckless’ lending, and we all know how this has affected home loan lending over the past few years, with the banks tending to err very much on the side of caution.

“Now with maintenance payments added to the list of debt obligations they must include in their calculations, and maintenance defaults to be included when it comes to credit scoring, it is very unlikely that anyone who is neglecting their maintenance obligations will be able to obtain a home loan – or any other kind of credit, for that matter.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK