Get­ting a loan will be harder f or de­fault­ers

Weekend Witness - - Opinion -

MAIN­TE­NANCE def aulters ar e shortly g oing t o find it mor e dif­fi­cult t o bu y pr op­erty, thank s t o pro­posed amend­ment s t o the N ational C redit A ct (NCA) r egu­la­tions.

Richard Gr ay, CEO of H ar­courts Real E state said the amend­ments, which will be t abled in P ar­lia­ment soon, pr ovide for monthl y maint enance p ay­ments t o be added t o the lis t of debt oblig ations that lender s must in­clude w hen c on­duct­ing the aff ord­abil­ity as sess­ments.

They also pr ovide f or an y judg­ment ag ainst a maint enance de­faulter t o be added t o that per ­ son’s cr edit r ecord, and t o r emain there f or fi ve y ears or un­til it is re­scinded b y a c ourt.

“Sadly, maint enance def ault­ing is all t oo c om­mon in this c oun­try, where al­mos t half of all chil­dren ar e be­ing r aised b y sin­gle par­ents, but the J us­tice Dep art­ment is hop­ing the se amend­ments will help chang e this sit­u­a­tion,” said Gr ay.

“We an­ticip ate the y will mak e it e xtremely dif­fi­cult f or an yone who is not meet­ing their maint enance oblig ations t o their chil­dren, t o obt ain fi­nanc e t o bu y a home or in vest­ment pr op­erty.”

The NCA alr eady s tip­u­lates that an y b ank c on­sid­er­ing a home­loan ap­pli­ca­tion mus t fir st es­tab­lish what the pot en­tial bor­rower’s inc ome is, w hat the r egu­lar monthl y e xpenses ar e, and what debt r epay­ment oblig ations he or she alr eady has as per an y credit agr ee­ments lis ted b y the credit bur eaux.

It also set s out s tiff penaltie s for an ything per ceived t o be “reck­less” lend­ing and w e kno w how this has aff ected home­lo an lend­ing o ver the p ast f ew y ears, with the b anks t end­ing t o err on the side of cau­tion.

— Business E ditor.

PHOTO: SUP­PLIED

Main­te­nance de fault­ers ma y find it har d t o buy pr op­erty s oon.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.