Which of the bank’s are offering 100% bonds
The major retail banks which include ABSA, Standard Bank, FNB and Nedbank all offer 100% or no deposit bonds, within certain ceiling limits.
ABSA, Standard Bank and Nedbank would consider financing a full 100% home loan up to a maximum property price of R1.5 million. This means any property that is priced higher than R1.5 million is considered for a 90% Loan Ratio, where a 10% deposit would be required. While, FNB would consider a 100% bond facility for property prices of up to R2 million.
What are the minimum requirements to qualify for a 100% bond?
- You need to be a SA citizen / possess a South African bar coded ID book.
- Your salary or income must be paid into a bank account
- You must not have had judgments and/or defaults listed on your credit profile
- The property you intend to buy must be acceptable for lending purposes i.e. residential purposes and fully occupational
- Your bond instalments must be paid via a debit order or payroll deduction facility
- You need to be employed permanently for at least a year, or prior employment for at least 2 years within a similar profession.
- No late payments or arrears on any accounts in the past 12 months.
The above pointers are only basic requirements, however there are other factors that the bank could consider such as property location grading and area, or self employed verses full time employed. It all comes down to the amount or risk, and the lower the banks risk the better the chances of securing a 100% loan.
Does a 100% bond cover attorney costs?
The banks are presently only financing up to the purchase price of a property. This means that the 100% finance offered will not cover any attorney registration or transfer fees. These costs will need to be raised separately.
How could I raise the attorney’s costs or deposit shortfall on my new home loan?
All of the major banks offer short-term personal loans as an alternative option to assist with raising any shortfall associated with purchasing your new property. Personal loans may range between R5000 and R120 000.00 over a period for as long as 60 months.
Alternatively Absa and Standard Bank have introduced ‘Pension-Supported Housing Loans’ whereby your existing pension or provident fund has a pre-agreement in place with each bank to allow you to borrow up to 80% of the value of your available pension fund savings in aid of raising a deposit for your new home purchase. More information about ‘Pension-Supported Housing Loans’ can be found by calling Absa PSHL directly on 0860 55 77 99 or Standard bank home Loans on 0860 123 000
What happens if I purchase a property that is valued at higher than the buying price?
This is something we find occurring more frequently in the current economic climate. The banks are calling this a buyer’s market, where prices are more often negotiated below the actual market value of the property in question.
What happens in this particular case is that the banks are now viewing the actual agreed price as the true market value. In other words, what the market is prepared to pay for the property is what the bank can place reliance on.
In the event they are to recoup the asset and resell to cover any future loss that may occur, the finance has to be kept in line with the agreed price.
At a later stage you could refinance your property and apply for a further bond, but this can only be done once you’ve paid off a substantial amount of capital of your bond amount.