100% home loans on offer again

Johannesburg - Banks have quietly adjusted their approaches to risk and some are again granting 100% home loans to the affordable side of the housing market.

This surprising twist came to light on Wednesday at the launch of Shaft Citi, a new development for affordable housing in Germiston on the East Rand.

Of the 67 sectional title units already sold, 26 were taken up with 100% bonds, says Ben van Niekerk, a director of Nu Citi Developments, the Shaft Citi developer.

He explains that negotiations were conducted with four major banks, and Absa and Nedbank indicated that they would approve 100% loans for the development.

First National Bank still has to take a final decision and Standard Bank is considering only its own clients for bond approval.

Nedbank will however approve 100% home loans only for properties up to R250 000, and buyers will be assisted through the entire purchasing process by a mentor.

Dr André Dippenaar, development manager for Pam Golding Estates (PGE), which is marketing the development, says banks are slowly but surely relaxing their strict lending criteria.

This product is aimed at households earning R7 500 to R25 000 a month.

Shaft Citi will be built on the site of an old mine hostel 17ha in size, and on completion will comprise 1 968 units.

Jacques du Toit, senior property analyst at Absa's home loan division, says that on a 100% bond of R150 000 over 20 years the monthly payment will be R1&n548 at the current prime rate of 11%.

- Sake24.com

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