select
|

Foreigners finding it hard to obtain home loans

Highly qualified foreigners are finding it hard to obtain residency permits which in turn makes it hard for them to obtain South African bonds on homes.

According to Rob Lawrence, a national manager of a bond origination service, foreign national bond applications falls under three categories:

• Temporary residency permits which include the applicant’s work permits, the permit for the spouse and other documentation.

• Permanent residency permits, which are in most cases issued to foreign nationals who have been in SA with temporary permits for at least five years. Holders of this permit can apply for a South African identity document which will show that they are non-South African citizens. This document confers on them the same rights to mortgage loans as apply to bona fide South Africans – which means that such people are not restricted, as are most foreigners, to a 50% loan.  

• South African citizenship. If and when a foreign national who has qualified for permanent residency renounces his previous citizenship, he can attain SA citizenship.  However, if his country of origin allows dual citizenship, he can hold that citizenship as well as a South African citizenship.

To get a bond the foreign applicant, says Lawrence, has to have a valid work permit, which must be stamped in his/her passport.

What is more, said Lawrence, the work permit has to have at least three years remaining before its renewal date, in order to qualify the applicant for a bond.

Even if, however, the applicant has all this documentation in place, he will still be unable to get nearly the full loan amount on his prospective purchase because, as indicated, most banks limit the Loan to Value (LTV) to 50% despite the applicant’s salary being credited to a SA bank account.

Those foreigners who believe they qualify as bona fide refugees, said Lawrence, face even greater difficulties in qualifying for a bond, their first and possibly most difficult challenge being to get the coveted refugee maroon identity document which has to be renewed every two years
The whole business of trying to assist such people – and thereby assist South Africa – is, said Lawrence, made more difficult by inefficiencies and very lengthy delays at the Home Affairs office.  These are encountered not only on first time permit applications but also on renewals, which can take more than a year to be approved by the Department of Home Affairs.

In one case, he said, a qualified female mining engineer holding a unique level of excellence achieved by only one other person in the world had been “blocked” for eight months, despite having an employment contract with Gencor.

In another case, a USA professor in virology could not get a work permit for six months, even though he is a recognised international expert in AIDS treatment.

“South Africa,” said Lawrence, “is desperately short of qualified people genuinely able to help us attain higher growth.  We should be trying a great deal harder to assimilate them – and to assist them in becoming home owners.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
        
    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