BetterBond helps 36 000 families buy dream homes

October was a record month for BetterBond Home Loans, SA’s biggest mortgage origination group, with more than 3600 home loans being formally granted to homebuyers from whom the group had submitted applications to the banks.
“And that brought the total number of families we have helped to acquire their dream homes over the past year to more than 36 000,” says BetterBond CEO Shaun Rademeyer.
What is more, the total value of the bonds granted through the group in October was just over R3bn – or approximately 25% of the total monthly value of bonds currently being registered in the Deeds Office, which puts BetterBond well in the lead among SA’s originators, he says.
“It also reveals a very healthy recovery in the property market since the 2009 recession, when bond approval rates plummeted and we were only able to secure around R1bn worth of bonds a month for our clients.”
At that time, the total value of bonds registered nationally (according to the Deeds Office), was only around R5bn a month - down from a high of around R32bn worth of registrations a month during the boom years, when BetterBond was achieving around R6bn worth of grants a month.
Now Deeds Office figures show that the value of mortgages registered has totalled more than R10bn a month and has been trending upwards for the past two years, and all indications are that October’s final registered number will be a newhigh for the past five years, says Rademeyer.
However, the rate of growth in total household mortgage balances is currently only around 2,7% a year, so BetterBondis well ahead of the curve, having achieved a 21% year-on-year growth in the value of grants secured in the 12 months to end-August – and a 23,85% y/y growth the 12 months to end-October.
“In other words, the successes we have had in the past three months are not only indicative of the current higher demand for property, higher property prices and the banks’ greater willingness to lend, but also of the efficacy of our home loan origination procedures,” he says.
“Our latest statistics show that our initial decline rate (the percentage of applications declined by the first lending institution to which they are submitted) showed a y/y drop of almost 9% at end-October, to only 38% of applications submitted.
“At the same time, the ratio of applications declined by one bank but approved by at least one other showed a y/y increase of 18% at end-October, resulting in a 9,5% y/y increase in BetterBond’saverage approval ratio to just over 75%.
“And what this means, in real terms, is that we are able to secure a bond approval for three out of every four homebuyers that apply for a loan through BetterBond – and around 30% .”

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