This is just one of those loan types that varies vastly from bank to bank and a very difficult bond type to get granted or to even apply for! Here is a breakdown of the various banks lower income earner offers that ABSA, FNB, Standard and Nedbank offer.
What is exciting is the new Housing Investment Partners (HIP) offering and FLISP subsidy that is now available.
ABSA Bank (MY HOME)
Absa MyHome is a home loan specifically designed for homebuyers who earn a single or joint monthly household income of R17 600 or less excluding housing subsidy. There is a fixed and variable rate option.
Features and benefits Up to 100% home loan covering the purchase price of the house. The monthly repayment of your loan takes place via a due-amount debit order. This facility saves you the hassle of going into the branch to amend the existing repayment amount where there is a change in the Mortgage Lending rate. A training course is provided (and mandatory) for all customers with loans in excess of 80% of the property valuation Life cover with the option of permanent disability cover is compulsory – qualifying cover is available from Absa Life without a medical examination.
Qualifying criteria To qualify for a MyHome Home Loan from Absa, you’ll need to: earn up to R17 600 per month (either as a single or joint monthly household income), have minimum employment period of 12 months. The employment period is not limited to the current employer, but may also include the period employed with a previous employer. in possession of a South African ID document, and show proof of regular income.
FNB Bank (HOUSING FINANCE)
A maximum loan amount of R240K will be given by FNB Bank. This option will only be offered to clients that earn less than R10000 (single). A minimum monthly income of R2500 will be accepted. Loans that are excluded from this option include: Vacant land, Business or commercial property loans, switches from other banks, staff loans and small holdings.
There is no deposit required by Nedbank. The lower income bond will only be accepted by Nedbank is the amount is below R150K. A minimum monthly income of R2500. The Home loan policy is compulsory (loan protection assurance). Exclusions include: Vacant Land, Business or commercial loans, switches from other banks, staff loans and small holdings larger than 8.5Ha.
Standard Bank (DREAM START) – A tough bunch of guys to get the lower income (dream start) application approved. It’s assessed extremely strictly on affordability – therefore a concession rate might not come into play. It might be prime plus up to 2% maximum. This is only for customers earning less than R8600 (single or joint income), excluding housing subsidy’s. A minimum monthly income of R1700. Permanent SA citizens only. A requirement of one years stable employment. Ability to have paid off loan by retirement – the term is therefore the retirement date. Acceptable credit record. Ability to pay monthly. Exclusions include: Vacant land, business or commercial loans, switches from other banks, staff loans. A maximum LTV (loan to value) of 103%, provided that the bank risk is reduced to 83% by means of collateral guarantee. A Home loan policy is to be taken out and the amount insured is for up to R500K. Fixed rate is allowed.
HIP – Housing Investment Partners
The new kid on the block financed by the Government and Old Mutual.
Targeting specifically first time home buyers falling predominantly within the affordable housing market with Gross monthly salaries between R3,500 and R20,000(single or joint). A great product and offering
Property values between R250,000 and R550,000 and Primary focus is on employers offering housing assistance to their employees in public sector employees(nurses, teachers,police,civil servants, the mining sector and other private sector employees of companies listed on the JSE.