Head of Home Loans at Standard Bank Steven Barker says, “We have experienced a sharp slowdown in applications since the end of March.
“We have started to see a small increase in applications in the past week as we start to see deeds offices opening. The current low volumes and with no real activity within Real Estate makes it difficult to assess what the impact on approval rates are at present.”
Application approvals continue, monitoring risk
Nedbank has continued to accept applications for bond finance throughout the lockdown period, but has also "seen a material reduction in demand".
Head of Nedbank Home Loans Thozama Mochadibane says since the slight easing of restrictions under Lockdown Level 4 – such as attorney instructions, opening of the deeds office, and ability to verify employment - the bank has started processing applications.
“We have also recently seen an increase in new business demand. Although we have seen a significant reduction in intake it has not resulted in a reduction in approval rate of applications.
“While some customers have been negatively impacted in respect of their income, particularly those with variable income, many customers have benefited from the recent 200 basis points reduction in the prime lending rate.
Mochadibane says at this stage it is difficult to determine the extent to which customers will be permanently impacted by Covid-19, but the bank is “closely monitoring our customers to ensure that they will still be in a position to afford their bond repayment once the loan is registered”.
Buyisile Maseko, FNB Growth Head for Home Finance – Gold Segment says FNB also “continuously reviews its policies to keep abreast of the current macroeconomic environment and our applicants’ circumstances”.
“New applications are vetted accordingly with the consideration of a customer’s credit standing and affordability. At FNB we understand that the buying process can be rather complicated and lengthy, but we are here to assist every step of the way.” Maseko advised FNB customers to make use of the FNB app to simplify the process. SEE: Top 9 common mistakes to avoid when buying your first home
What do I need to be pre-qualified for a bond?
A pre-qualified home loan will give first time home buyers a good indication of what house they can afford. This amount is not a guarantee from a Bank but rather a guideline to be used when house hunting.
There are two ways in which to apply for a pre-qualified home loan. You can go to the Banks directly, or use a mortgage originator. A mortgage originator will help you apply for a bond at multiple lenders, giving you the freedom to compare quotes, whereas your private bank will evaluate your existing relationship with them to determine your loan rate.