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