Banks are releasing funds slowly, but it is happening...

There have been two recent changes in the banking sector which are worth mentioning for all prospective buyers out there. The first was Nedbank taking the reins by allowing 100% loans up to the amount of R3 million. The second, was FNB allowing loans of 100% up to R2 million.

To illustrate the difference between before and after, on a 90% loan to the value of a R2 million property, you would need to have found an extra R200 000 on top of the bond registration and transfer fee costs! Now it would only mean you need the money for the costs.

With the New Credit Act (NCA) in place, it will be very difficult for people with more complicated (unclear) earning scenario's, such as the self employed (I can relate to this personally).

I can only hope the banks have learnt many valuable lessons out of the recent financial crisis, such as, don't hand out 108% loans to salaried people at the bottom of an interest rate cycle, without having these rates fixed. It's quite obvious that the salaried person's income will not match a 5% rate increase and therefore the bank ends up with a massive bad debt book!

Luckily, our government did not have to bail out any of our banks, but what about those who lost their homes!?