If you are looking for a property in South Africa and you're going to need finance, you will want to find the best home loan available for your own personal needs. There are four major commercial banks that have a range of different home loan products that cater for both individuals and other legal bodies including trusts and close corporations. You will need to assess which option is best for you.
All four South African banks offer home loans with both fixed rate and variable interest options that can be paid back over a given period of time, from five to 30 years. They also all have a range of options, and most will finance vacant land, homes and also building projects, within their own set of rules. Here is a smattering of information about the four of them.
Absa Bank caters for individual people and couples who earn either above or below R15 000. They are willing to finance 100% loans for smaller loans, and will tailor-make home loans for their own existing clients. Absa also has a home loan package for people who want to buy and then rent out the property.
Like Absa, FNB has options for both individuals and couples who earn up to R15 000 or more than R15 000. FNB has also created specialised packages for both foreigners wanting to invest in domestic property in South Africa, and Muslims who are bound by the Islamic faith that does not allow any form of money interest. FNB's IslamicFinance package isn't limited to those of the Muslim faith, but it is only available for bonds in excess of R240 000.
While Nedbank will finance both vacant land as well as houses, they appeal to the higher end of the market, and they don't offer specific deals for first time home buyers or those people who earn a small monthly income. Like Absa, Nedbank has a specific home loan for those who want to buy and then rent the property out. Clearly aiming at people who aspire to being successful, Nedbank does have a different type of home loan – and this allows borrowers to apply for an amount which is more than the value of the property that they are buying. This additional money is not paid out when the bond is registered, but it is available later, when the property is worth more or when the borrower is able to afford a larger repayment figure.
Standard Bank caters for the lowest income bracket, offering DreamStart home loans to entry-level home buyers who earn between just R1 500 and R6 000 a month. Standard also has home loans available for first time buyers who earn at least R6 000 both jointly (husband and wife) or on their own. Their standard (or ordinary) home loans are offered to anyone in permanent employment who earns more than R6 000. It will be up to you to decide whether this bank offers the best home loan or whether you will find it at another financial institution.
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