There is an increasing trend in South Africa that is seeing youths entering property market at a much earlier age. These youths are mostly first-time home buyers, applying for their first home loan, who have been renting for a short while and feel the need to invest in a property of their own.
It is partly due to this increasing trend in South Africa’s property market that is also causing a higher percentage of 100% home loan applications. These prospective home owners often earns salaries large enough to qualify for home loans but they don’t seem to be able to save enough of that salary to put down any type of deposit.
And understandably banks are becoming more and more reluctant to issue these 100% SA home loans. Foreclosures have cost banks millions of rands and it is not a surprise that some economists are calling to the maximum Loan-to-value ratio to be dropped to 80% instead.
This should see a rapid decrease in foreclosures which most often occur from 100% home loans.
Before deciding to buy it is advisable to try and save up a small deposit, between R10 000 and R20 000. Displaying the ability to save up a small deposit at least should add weight to your home loan application.
Click Here to have a Home Loan specialist contact your for free Home Loan advice and begin the home loan process.