Interest rates may be important but equally important is the rate of inflation which can eat up the value of one’s real estate investment which is a possible scenario in home loans. The state protects the homeowners by making corresponding adjustments on the interest charges imposed by banks and financial institutions. Banks usually have uniform charges for home loans which are pegged at certain levels agreed by the banks themselves.

To be constantly informed of changes in interest charges and other vital information, it is best to be in touch with bond originators or financial service advisers which are always reachable through the internet. For home loans, there are just a few specific banks that can give the best rates of interest which more or less will be at the same levels set by the banks by agreement. There are no extra charges or manipulative fees as these have been disallowed by regulatory authorities in South Africa.  One can expect these banks to be fair and truthful when preparing loan proposals for their borrowers.

When assessing a borrower’s qualification, the first thing that banks is interested to know is his credit standing.  This means that they will have to look at one’s credit history and payment performance of previous loans on record. It is in the preparation of such documents that one will need the assistance of financial service providers in the internet who have the expertise in preparing loan application documents. One has to provide the correct information for the financial advisers to assess and screen in advance the data that the banks will be presented to the banks when applying for home loans. It must be understood that these procedures are being done for the benefit of the borrower who must be protected from getting into debt obligations that he might not be able to repay.

The financial data on the borrower submitted to the bank for their assessment shall form the basis of the home loan conditions that the bank will offer to the borrower in a definite written communiqué. This is another feature that protects the borrower’s interest.

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 home loans

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.

First National Bank loans

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.

Nedbank home loans

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 home loans

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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