The information in this article is courtesy of Fin24 (100% home loans on offer again – 11 June 2009)
The launch of Shaft Citi – a new development for affordable housing in Germiston on the East Rand – showed that banks have quietly adjusted their approaches to risk with some of them granting 100% home loans for the more affordable side of the house market.
The surprising twist came when 26 out of the 67 sectional title units sold, were taken up with 100% bonds.
Ben van Niekerk, director of Nu Citi Developments, explained that they negotiated with four major banks and Absa and Nedbank indicated that they would approve 100% loans for the development. FNB still has to make a final decision and Standard Bank is considering only their own clients for 100% bonds. Nedbank, however will only approve 100% bonds for properties up to R250 000 with buyers being assisted through the entire purchasing process by a mentor.
According to Andre Dippenaar, who is marketing the development for Pam Golding Estates, banks are slowly but surely relaxing their strict lending criteria.
The development is aimed at households earning R7500 to R25 000 a month.
A 100% bond of R150 000 over 20 years will result in a monthly payment of R1548 at current prime rate of 11%.
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