New Home Loan
In the increasingly competitive banking environment, it is a good idea for those thinking of buying a property to get themselves pre-approved for a bond.
One of the key trends seen in the property industry is a much more significant competitive environment in the banking space.
The home loans lending space has become significant in terms of profitability for the banks. That competition has been beneficial to the consumer - and we have seen a nice comeback as a result of competitiveness.
Affordability, however, remains an important factor because of the Credit Act.
To qualify for a home loan you need a certain amount of money. So, with the increasing cost of living, we see more pressure on bond applicants - with decline rates up 4% in the 2016 financial year.
From a consumer perspective, even if they can afford the property on their current income, banks price the future into the model. So we find buyers do not qualify due to their future down the line. That is why we encourage buyers to buy within their means and to get pre-qualified for a loan before you going house hunting.
Another trend in the homeloan market is a jump in the number of black applicants. A year ago they were about 43% of those applying for a home loan and has now increased to 48% this year.
Whats more, first time home buyers now make up 55% of the market - but this figure is expected to decrease in the next year.
Banks are going to try to get more and more of a deposit along with a home loan, because of the economy. The self-employed are still a small section of the home loan market and, for banks - if you are self-employed, when things turn bad, that sector turns bad first. So banks are more cautious now. Some self-employed people even say their employees get loans more easily than they do!
About 50% of home loan applicants are looking for a 100% home loan, but only about 37% of loans finally approved are for 100% bonds. Banks are more and more in favour of people who can pay a deposit.
As for the property market in general, there has not been sufficient new stock coming into the market for the past few years - so demand is increasing, despite what economy is doing. 2017/8 is not expected to be significantly different.
The increasing slow economy will slow demand - but we have seen 7% to 8% price increases and expect it to slow to 6% to 7%.
Continued activity is expected, as people want to get onto the property ladder as soon as possible. As an asset class, it has delivered a fairly good return - and any significant change in demand over the next 12 months is not expected.
As for trends in the profile of property buyers, in 2002 56% of buyers were under 40 years old - now it is 44%. Young people are staying at home longer and renting for longer - so those over 50 years old are becoming increasingly greater property drivers.
Another trend has been a shift back to fewer freehold properties because of the maintenance required.
The younger generation is quite happy to have flats and be close to work. The change from big gardens in the suburbs from a security perspective can also be clearly seen.
To apply for a home loan, click on the following link: www.qoob.co.za - and simply fill in the Buyer Details section.
One Application Form automatically submitted to All the banks
Sit back and relax while all the banks bid for your bond!
Although, the prequalification procedure is not a guarantee that your bond finance will be approved for the amount you request, it is an important procedure to go through because:
- It gives a good indication as to what the banks should grant you based on your credit record and income
- It substantiates your credibility as a serious qualified buyer
- It assists you the purchaser, with the means to calculate how much you can purchase for
To apply for pre-qualification, click on the following link: https://prequal.qoob.co.za - and simply complete the form.