Home loan FINANCING

Are you applying for home loan finance? Read this, writes Denise Mhlanga

- Denise Mhlanga

Buying property is a big decision and a costly exercise. Not all buyers have available cash for the purchase, and many will have to apply for a loan from a bank or financial institution.

Despite a third, and 50 basis point increase in the repo rate, banks are still willing to lend, and potential buyers are always encouraged to save money for a deposit, especially when a bank loan is needed.

"Based on the property, a home loan applicant's credit profile, and the bank's policies at any given time, banks do not always ask for a deposit when purchasing property," says Angela Glover, head of product for secured lending at FNB.

She explains that first-time buyers, in particular, have accessed finance without paying a deposit. To help customers attain home ownership, the bank offers discounts on attorney fees, eBucks rewards to the value of the loan initiation fee, and in some cases, no deposit.

FNB lends responsibly to ensure it is not overexposed from a credit risk point of view and that customers can afford their repayments.

A DEPOSIT IS RECOMMENDED

"A deposit lowers the risk of the transaction by reducing the loan amount as a percentage of the value of the property. By paying a deposit, you reduce the amount of money loaned from the bank, saving yourself interest in the long-term while also reducing your monthly repayment," Glover says.