select
|

Bank mortgage declines put pressure on property prices

Over the last few months 100% home loans decreased by 20% as the percentage of all applications approved. This puts pressure on house prices and the property market in general.

"Even though Basel III has not yet come into play, you can definitely feel that banks are tightening up their lending criteria," says Sandy Reddy, Head of Origination of EV Finance. According to Nomsa Motshegare, acting CEO of the National Credit Act (NCR), in December 2011 there was a 1.3% increase in credit-active consumers.

"As banks have tightened up their lending criteria it is important to know your credit status and be in control of it, especially when it comes to applying for a home loan. Banks are even more cautious now than what they were a few years ago."

"If during the last 6 months you skipped a payment on any of your accounts, for instance even on a clothing account, your chances of obtaining a 100% loan will drop to nil. A few years ago you would still have been eligible for receiving mortgage finance. In the case where you have missed a payment, you will have to wait another 6 months before you can apply for a home loan.This means the chances are that you will lose out on that home you were looking to buy and will have to settle for something less," Sandy added.

Sandy also mentioned that people considering buying a property in the near future should be savvy about the lending criteria of the bank. Before you apply for a home loan you will have to ensure that you have not had any credit related issues in the last 6 months to a year. The public have become more aware of the requirements when applying for home loans and are usually prepared when they do apply.

"As the credit-active consumer count grows, so will the credit related problems. Consumers should be aware of this and should keep their appetite for borrowing limited as the banks will definitely tighten up even more.It is imperative that you keep away from unnecessary credit if you are looking toapply for a bond in the near future," Craig Hutchison CEO of Engel & Voelkers concluded.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    • 14 Feb 2018
      While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home? In areas where demand outweighs the current supply of homes available to buyers, it is not unheard of to have buyers make offers on homes that aren’t on the market, 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