SA HomeLoan News: New National Credit Act
The New National Credit Act comes into effect today [1 June 2007] and many Mortgage Bond experts are waiting to see what effect this will have on Home Loans in South Africa and the SA Property Market as a whole.
From a homeloan applicant’s point of view the major difference the new National Credit Act will have on your Mortgage application is that each bank will have to make 100% sure that you can afford to pay off the bond every month.
If it can be proved that the bank has recklessly granted you a South African Mortgage, under the new credit act, they will liable for that full bond amount and will face a huge fine from the Regulator.
For this reason the banks will have to closely scrutinize your bond application.
How much do you qualify for
Also, the credit approval process has changed. Previously you would only qualify for a homeloan based on 30% of your monthly salary.
Starting 1 June 2007 the banks will base their bond approvals on your total DISPOSABLE Income.
After deducting Tax and all monthly expenses [including groceries etc] from your salary you’re left your total disposable income.
From today you will able to use your FULL DISPOSABLE income to qualify for a home loan. Which means if you R10 000 after all deductions you an qualify for a bond of about R950,000.
Remember, you can also apply for a bond jointly and thereby qualify for a bigger bond amount.
Speak to one of our Bond Consultants for more information about how the new credit act affects your home loan application.
Click Here – Apply Online now through Property Loans to all the major banks.
Does the new NC Act really prohibit banks from giving you an indication of the bond you qualify for as well as the interest rate applicable BEFORE any offer to purchase has been made and despite you having declared your income as well as all expenses to the bank to determine your ability to afford the bond payment?
Or is it only an excuse used by banks to prevent the potential buyer from shopping around for the best interest rate?