Firm’s home loan ap­proval rate jumps to 80 per­cent amid in­creas­ing home prices

Weekend Argus (Saturday Edition) - - PROPERTY -

AC­CORD­ING to the lat­est sta­tis­tics from mort­gage orig­i­na­tor Bet­terBond Home Loans, its home loan ap­proval rate has topped 80 per­cent in the past month – the high­est level since 2009.

The Septem­ber fig­ures also show a 30 per­cent year-on-year in­crease in the value of home loans ap­provals achieved by Bet­terBond, to R1.7 bil­lion a month, says chief ex­ec­u­tive Shaun Rade­meyer.

“This is partly a func­tion of the in­crease in the av­er­age home price, which our fig­ures show has risen 9.8 per­cent in the year to the end of Septem­ber,” he said.

“But it is also an in­di­ca­tion of the ef­fec­tive­ness of mort­gage orig­i­na­tors, who pro­vide po­ten­tial bor­row­ers with a com­par­i­son of the var­i­ous bor­row­ing op­tions on of­fer at any par­tic­u­lar time, and will mo­ti­vate their ap­pli­ca­tions in­di­vid­u­ally and sub­mit them to a num­ber of dif­fer­ent banks if nec­es­sary.

“It is worth not­ing that al­though the ini­tial de­cline rate dropped in Septem­ber, more than half the home loan ap­provals we achieved over the past year were only achieved on sub­mis­sion of the ap­pli­ca­tion to a sec­ond or even third lender. Also, the per­cent­age of ap­pli­ca­tions turned down by our client’s own banks and then ap­proved by a dif­fer­ent bank has risen from 13 per­cent to 15 per­cent in the past 12 months.”

Mean­while the sta­tis­tics show a 13 per­cent year-on-year in­crease in Septem­ber in the av­er­age size of bonds ap­proved for those who ob­tained their home loans through Bet­terBond, and an av­er­age de­cline of 2.4 per­cent in the size of the de­posit re­quired.

The av­er­age pur­chase price paid by first-time buy­ers rose 5.1 per­cent year- on- year to R658 516, and the av­er­age ap­proved bond size for such buy­ers rose 6.7 per­cent.

How­ever the size of the av­er­age de­posit re­quired by first-time buy­ers rose 11.5 per­cent, so it was for­tu­nate that the per­cent­age of loans granted for 100 per­cent of the pur­chase price in­creased year-onyear from 33 per­cent to 38 per­cent.

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