With the worst of the financial crisis behind us, banks have started loosening their purse strings and have become a bit more generous when considering applications for home loans. However, while 100% home loans have once again been available to applicants since August last year, the chances are still quite slim of actually qualifying for one. According to the latest statistics from ooba, the proportion of consumers applying for 100% loans increased to 44% of overall applications in December, up from 18% in September last year. Nearly half of the applications for 100% loans were only approved subject to a deposit being paid. While the number of applications for home loans have increased significantly, there has been a 10,5% drop in the average bond size from R707 760 in December to R633 457 in January, according to ooba. FNB’s property index for February showed yesterday the housing market continues to recover, and with an expected 8% rise in prices this year, home loans should become increasingly available. There are a number of things to consider when shopping around for a home loan:
Make sure you know what you can afford. Banks usually offer an online mortgage calculator to give you an idea of the size of the loan you qualify for.
Be realistic about what you can afford. Ensure your monthly bond repayments will suit your budget, and keep in mind all the other expenses associated with owning a house. These include maintenance, repairs, insurance, property taxes, and rising water and electricity prices.
Shop around at different banks and find the one who offers the best deals on their home loans. If you have a good credit record, you should easily qualify for a loan at an interest rate below prime. Make sure you understand the terms and conditions.