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
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.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us