SA Home Loan News

'Interest rates likely to stay low'
http://www.iolproperty.co.za/roller/news/entry/interest_rates_likely_to_stay

The South African Consumer Price Index, so closely watched by the economists trying to predict future scenarios, has, contrary to the expectations of many of these commentators, come down in the last two months.
A very welcome wide scale cut -back in spending by the general public, says Bill Rawson, Chairman of the Rawson property group, has brought the Consumer Price Index y on y growth down from close to 7% to just on 6%.
This, says Rawson, is good news for consumers and for businesses needing credit as it will probably mean that the current ultra-low interest rates so beneficial to buyers on long term credit, especially home buyers, will probably remain in place until well into the second half of next year.

Agents have long been viewed with suspicion and while certain misgivings are occasionally justified, it is often not the agent attempting to pull the wool over a buyer’s eyes, but rather the seller who has been sparing with the truth. The Consumer Protection Act (CPA), however, is going to change the way that agents do business. As things stand, the Act does not apply to a seller who does not ordinarily sell property for a living. Estate agents on the other hand do and if the courts find that an agent has neglected to disclose pertinent information and facts then agents can be held responsible which could, in the worst case scenario, lead to the sale being overturned. It appears that agents are no longer going to be able to take the sellers word for it and they are going to have to delve into the property’s history to ensure that everything that the seller has stated is true.

As you can see the seller will not always disclose the information to the agent, and unless the agent conducts a thorough investigation, some defects will not be exposed. At this stage most sellers are not bound by the Consumer Protection Act, and the agent can claim that the seller did not inform his/her when a case goes to court. 

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Banks remain cautious in home loan lending
http://www.sacommercialpropnews.co.za/property-types/housing-residential-property/3565-banks-remain-cautious-in-home-loan-lending.html

In spite of the interest rate being at a 33 year low, banks remain very cautious in terms of granting home loans with all information submitted to them being thoroughly analysed to ensure the applicant’s affordability, says Kim Pistor, legal advisor and conveyancing manager for Rabie Property Group.

Pistor said while it was relatively straight-forward to confirm the monthly earnings of salaried individuals, the same cannot be said for those who are self-employed.  “In these cases supporting documentation is a key element to a successful mortgage application with the banks requiring a financial history of the preceding two to three years.  

“These applications usually take longer to obtain bond approval as they are often initially declined due to the various banks tight criteria related to self-employed individuals.  It is often not the client’s own bank who eventually issues an approval and it is for this reason that the services of a mortgage originator are beneficial,” says Pistor.

Property Transaction Kit
http://thepropertymag.co.za/industry-news/3127-new-property-transaction-kit.html

Dianne Brock, the new general manager of the Western Cape Institute of Estate Agents, has recommended a new computerised property transaction kit.

The aim of this kit is to facilitate the sale and transfer of property in compliance with the stringent criteria of the new Consumer Protection Act.

The new kit, said Brock, covers every aspect of a property deal including the valuation, the role of the conveyancing attorney, the standard sale agreement, the title deed and the Surveyor General’s diagram of the property. Also included are the body corporate and homeowners’ association rules, building plans, the zoning certificate, the house inspection report and the beetle, electrical, plumbing and gas certificates, as well as a short legal section on dispute resolution. This encourages the insertion of a mediation of arbitration clause in the sale agreement and has recommendations on how to insure against litigation costs.

Absa lends up to 100 percent home loan
http://www.property24.com/articles/absa-lends-up-to-100-percent-home-loan/13990

Absa says it is still giving 100 percent loan-to-value to would-be home buyers even in this market but only if they qualify.

According to Sifiso Shongwe, managing executive of Absa Home Loans, loans are being granted across the board to applicants who qualify - meaning they have a good credit rating.

“Since the National Credit Act came into effect, the dynamics have changed and as banks, we have to exercise responsible lending,” says Shongwe.