Effective 1 January 2015 we will revert to the normal MyHome product offering which is made up of
ABSA Loan term adjustments:
While this is an existing value proposition we felt the need to include it as part of the repositioning statement. Customers, particularly those in the affordable housing segment, generally don’t qualify for home loans due to affordability; even though they meet all other credit requirements. By extending the term from 240 to 360 months customers may now qualify for a higher loan amount – the table below provides an example:
Fixed rate options:
We offer our customers three fixed-rate options, i.e. 12 months, 24 months or 60 months.
- Life Policy: Compulsory for the MyHome product where the LTV is bigger than 70%. Customers have the option to avail themselves of the Absa Life Insurance product or cede an existing life policy.
- Borrower Education: Compulsory for the MyHome product where the LTV is bigger than 80%. This training programme takes place at the final grant stage and completion is required prior to registration of the home loan.
- Home Owner’s Comprehensive Insurance: This insurance is compulsory; customers have the option to choose the Absa Home Owner’s Comprehensive Insurance product or cede an existing home owner’s policy, subject to the policy meeting Absa’s minimum cover conditions.
- Finance Linked Individual Subsidy Programme (FLISP): For monthly income levels between R3 501 to R15 000. FLISP is a government housing programme for households earning between R3 501 and R15000 per month. This target market will receive a subsidy grant of between R87 000 (income R3 501) and R20 000 (income R15 000); there is no maximum purchase price. Absa Home Loans concluded a memorandum of understanding with the National Housing Finance Corporation to provide FLISP to all qualifying applicants. The NHFC is commissioned by the Department of Human Settlements to administrate FLISP on their behalf.
Absa Home Loans’ affordable housing segment is continuously investigating innovative solutionsto assist government to close the housing gap in South Africa. In addition, we are committed to the Financial Sector Charter Code’s housing objectives.
Thank You ABSA for providing us with this information.