ABSA launches new Home Loan facility

100% No Deposit Home Loans

South African Banks are constantly changing their lending policies.
100% Home Loans have returned & are available, but the banks are understandably more cautious when approving these bonds.
Read: How to secure a 100% Bond

In the News: ABSA Home Loans

Absa, one the largest providers of SA Home Loans, has launched a brand new Gold facility option. Designed to ease debt consolidation. This new mortgage product is a home loan and a cheque account in one, which can be accessed through ABSA internet banking. The Gold facility has a single management fee that covers everyday transactions.

As most investors will know, one advantage of having a home loan is that you can consolidate your credit card and other debts into your mortgage account. Interest rates charged on home loans are much lower than other accounts and in this way you can save thousands in interest charges.

Says Rodger Dunn, managing executive of the Absa group’s Retail Banking Services: “Increased property values mean that customers can save a substantial amount of interest, just by consolidating their debt into a flexible Absa home loan. It’s financial harmony and, we certainly hope, music to many consumers’ ears.

The benefits of the ABSA Gold single credit facility is that it offers a competitive ABSA home loans interest rate (which is much lower than any credit card rate) and a single monthly banking fee.

Jaco Grobler, managing executive of Absa Group Home Loans, says: “The Gold facility has been designed with consumer interests and flexibility in mind. Many people are taking on extra credit at far more expensive rates than an Absa home-loan rate, without necessarily realising that they could use the capital available in their home loan.

“It therefore makes sense for Absa to take the lead in championing consumer interests relating to wholesome credit management. Consumers can now make even more use of their fully secured asset and utilise the equity available in their home loan. All round, it’s value-for-money, cost-effective credit management.”

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6 Comments For This Post

  1. Esther Says:

    Hi

    I want to know more about consolidating home loan because currently i do have a loan. Is it possible to change from the one that i am paying (high) to the your system that i understand is lower

    RESPONSE:
    This is in response to your request for more information about consolidating
    debt using you home loan account.

    Here is a brief description:

    You stated that you do currently have a home loan account, but that your
    interest rate or monthly repayments are too high. One way to lower your home
    loan interest rate is to switch your bond to another bank. The lower interest
    rate payments would mean that your monthly repayment would drop thereby saving
    thousands on your total home loan amount. The process of switching is not too
    complicated and the total savings could be as much as R100 000.

    With regards to consolidating debt using your home loan:
    The interest rates charged on Credit Cards and Car repayments are usually much
    higher than your bond rate. Therefore many people choose to use the equity
    available in their home loans to pay off their debts.
    For example –
    If you home is valued at: R300 000 but you only have bond of R250 000, you can
    apply for a R50 000 readvance on your mortgage and then use that to payoff your
    credit card, or other high interest debts.

    Since, every bond is unique, it is best to contact a home loan specialist who
    will be able to review your account and provide more assistance.
    For free assistance visit IBO HOME LOANS online, complete the form and a home
    loan consultant will contact your immediately.

  2. faizel Says:

    Hi,

    I’ve read your comments about consolidating debt. In your example you mentioned credit cards and car repayments. My question (just to confirm), if we have a bond of R350 000 and have a vehicle HP of say R70 000, is it best to consolidate this HP with the bond? (to take advantage of the lower interest rate, also the flexi reserve of the bond is in excess of R500 000).

    Reply:

    That is correct. Since you home loan account is charged a much lower interest rate than other debts it is best to apply for a re-advance on your existing home loan to pay off your other high interest debts such as your car or credit cards.

    The advantages of consolidating:
    1) All you debts are consolidated into one account, you therefore only pay one account – your home loan account.

    2) You total monthly expenses are lower because your home loan account is a low interest account.

    3) You can pay off your car or credit cards much faster by paying your normal installments.

    If you’d like a home loan consultant to contact you directly, complete this short form online.
    The consultant will be able to guide to through the consolidation process.
    Note: This is a free service.

  3. MRS M.E. BOTHA Says:

    We have a home loan already want to invest in a holiday home want a pre approved home loan before the 26/1/06

    Replay:

    Hi Mrs Botha,

    The quickest way to get the pre-approved home loan is to apply to a number of banks through a mortgage originator. Complete this short form online and a home loan consultant will contact you immediately to begin processing your pre-approval request.
    Note this is a completely free services and expected turn-around times for you request is about 48hours or less.

    Click here to complete the short form now.

  4. Ken Taverner Says:

    I have a query-If you are currently employed overseas and expect to be returning in afew years ,can one get a homeloan and up to what amount ?

  5. GB Says:

    Hi, I currently have two seperate bonds with Absa (with two different interest rates)
    Is it possible to consolidate these two bonds into a single morgage/ cheque/ credit account (one account) and if it is a good option to take, why has nobody from Absa contacted me to offer this as a option?

  6. Gino S Says:

    Hi GB.
    Thanks for your excellent question. When it comes to home loans, the general rule is One-Property-One-Bond. This means that you cannot have 2 bonds on 1 property, or visa-versa. In your case you would like to consolidate 2 bonds into one account. The way to do this would be to refinance one property and use those extra funds to payoff the other property. You would then have a bond-free house and 1 bond on the other property. If you need further assistance with this please email: olen@propertyloans.co.za or call us on 0861 111 563.

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