FNB has launched an industry first property lending solution that allows up to eight members to buy property as a collective for residential purposes to help aspiring homeowners to afford property.
The bank’s retail chief executive, Raj Makanjee, said buying a home was one of the most fulfilling long-term investments that most people would ever make.
“Even though interest rates are at record lows, the global pandemic has made it increasingly difficult for aspiring homeowners to afford properties. Through the launch of the Collective Buying solution, we aim to bridge the gap in the market and help all customers realise their ownership dreams with ease.”
FNB Property Finance chief executive Lee Mhlongo said their records showed that when a customer considers purchasing a property, they tend to forget all the other additional costs included in their home loan, such as registration costs, transfer duties and sometimes a deposit, presenting more barriers for one to afford the property.
“The advantages of buying a property collectively with friends and family means that customers are now able to share the costs equally to make the purchase and the process affordable. Another advantage is that customers will also enjoy reduced monthly repayments and personalised rates.”
To kick-start the home loan application journey, customers can submit the application via the FNB App on nav »Home. This permits up to 8 applicants, inclusive of applicants who are married in Community of Property (COP), to be added. Should the number of applicants exceed 8 parties, this can be applied directly via the FNB channel such as a branch.
Once the application has been submitted, the bank would review each customer's credit profile, including the nature of income, expenses, household size and affordability. These were assessed in conjunction with credit bureau profiles and the information on the account conduct with various creditors and banks. The solution allowed for customers to elect and deposit funds directly into one transactional account and to run debit orders or to request a stop order payment from their transactional accounts.
Furthermore, FNB has split billing functionality which allowed multiple parties to pay on various dates at specified contributions.
“We urge customers to take advantage of buying as a collective and start their journey to own property. This is another way we are helping our customers to own their dream home and unlock their wealth creation journey, through investing in property as a group. Customers that fall within the ‘gap housing market’ whose income is between R3 501 – R22 000 are still encouraged to consider FLISP, a government home ownership assistance programme. The benefit of a cash contribution from such a programme can significantly reduce the financial burden on households,” Mhlongo said.
An article by bond originator ooba Home Loans titled Property market in 2021, read: “Low interest rates made it a buyer’s market earlier this year, the interest rate cuts of 2020, and the work-from-home lifestyle resulting from the pandemic, continued to play a role in property investment for 2021. This was despite a tumultuous period for the South African economy resulting from the coronavirus pandemic and subsequent lockdowns. But following a resurgence in property sales in 2020, the SA property market continued to show signs of growth despite the pandemic and economic climate.” | [email protected]
BUSINESS REPORT ONLINE