Following a tough 18 months for people selling their properties and estate agents this positive news is a welcome sign of improving economic conditions. The past year and a half witnessed thousands of property industry jobs being shed due to the dramatic drop in sales volume in the property market.

Nedbank lowered its deposit requirements to between 0% and 10% of the value of the property depending on the client’s risk profile. Falling house prices was the main reason that Nedbank had increased their minimum deposit to between 10% and 20% during the past year. Although the bank believes that a 5% to 10% deposit should apply they will consider 100% mortgage loans for low-risk clients. Eager to attract new business the relaxation of deposit requirements will apply to new clients as well.

Nedbank will make no differentiation between clients who apply to the bank directly and those using a mortgage originator when applying for a home loan. The important role that mortgage originators have in sourcing new business for the banks makes this a sensible decision. The selection criteria for home loans is based on the client’s risk profile and the ability to repay the home loan.

The reduced interest rates and the relief this has brought to consumers influenced the decisions of the major banks and this is reflected in an increase  applications for home loans and a stabilisation of prices in the residential property market. The reviewing of the various bank’s offerings to their clients is a result of the evident turn in the economic cycle.

This follows after a recent report by Lighthouse,a property valuations company was released last week. According to the figures given in this report various had already started showing an improvement as early as May this year and the company expects property prices to start moving upwards for the first time in 16 months. These predictions are based on data from the Deeds Office. The company is still waiting for data for the months of June and August before releasing final figures.

The Eastern Cape seems to be the area that will be the first to recover from the property market recession with the lower income housing showing higher returns than more luxury class housing which is currently the worst performer. The volatility of the affordable property market segment over the past few months makes current predictions very difficult.

According to a recent market report by Absa’s senior property analyst Jacques du Toit, the average nominal price of houses in the R3.1m -R11.5m continued to rise in the second quarter of this year. Taking inflation into account although house prices increase by 4% in value year on year the total decline is expected to be 3% for 2009 whereas the prediction is that house prices will increase by the same percentage next year.

The extensive restructuring and the re-establishment of a dedicated Nedbank Home Loan business unit has resulted in a marked decline in the bank’s loss of home loan market share compared to that of five months ago.

“The dissolution of Nedbank’s dedicated home loan unit some years ago blurred the bank’s focus on cost structures and service support levels around home loans,” says June Tudhope, Nedbank Home Loans managing director, who took over the newly created division last October.

The creation of a stand-alone division to drive the strategy around the entire home loan process, from point of sale to that of registration, testifies to Nedbank’s commitment to home loans. A newly created executive management team of seven and workforce of 939 is also evident of the directors’ pledge for the bank to cater for all people.

In the past, poor service levels, cumbersome and slow internal processing, particularly of valuations and automated credit assessments had allowed other banks with more advanced technology, faster processing, and quicker approval times, to take the lead. Mark Danckwerts, Process divisional general manager, and Eugene Drotskie, Operations divisional general manager, have been tasked to place the bank among the forerunners in this strongly competitive arena.

Nedbank Home Loans’ credit and risk profiling is now being reviewed to align this with the bank’s market profile and Pieter van Heerden, Value Analytics divisional general manager, has been tasked with this responsibility.

To address staff challenges associated with the division’s restructuring, Diana Musara has been appointed Strategy, People, and Projects divisional general manager. Nedbank Home Loans believes that building a motivated team with a sound strategy implemented through effectively managed projects, can only improve service levels and assist with market share growth.

In addition, Nedbank’s complete range of home loan products has also been carefully assessed against those of its competitors with acceptable results. Nedbank Home Loans is now focussing on the affordable housing market, equity release products and the fine-tuning of some existing products. Lindiwe Mbongwe (nee Kubeka), Innovation and Development divisional general manager, has been tasked with addressing these areas of focus.

Greg Salter, Home Loans chief financial officer, will be keeping a close eye on the division’s financial performance and will be providing the management information to enable the team to track progress, and ensure that Home Loans’ strategic imperatives are implemented.

According to Tudhope, lending volumes from the buy-to-let home loan – another market first by Nedbank – slowed in the first quarter, which is an indication of the growing risk involved in this market. Other first quarter trends include a lowering in Nedbank’s average size of loan in the upper and affordable housing markets.

“Although 60 percent of the bank’s home loan business is being sourced through mortgage origination channels we are contemplating reinstating Nedbank’s direct distribution channels to estate agents and developers,” Tudhope continues. “This is in line with the current industry balance of about 30 percent of all home loans being directly sourced from these two channels.”

Given the current momentum of the division, Tudhope’s team is cautiously optimistic of the division “turning the corner” by the third quarter and placing Nedbank Home Loans on an equal market footing with its competitors early next year.

Online Home Loan Application

As published on the Nedbank website

The restriction for this option has been lifted on the AlphaBond and all qualifying clients including first time homebuyers are now eligible due to the increased demand in the market. Clients will receive a 104% Loan to Value bond that will cater for an initial payment holiday (deferred payment) of up to 3 months and payment is only required in month four.

Please note that this option cannot be exercised in conjunction with a 108% Loan to Value option. Clients requesting this feature may apply for an AlphaBond Option 2 (Initial Payment Holiday) and all other product rules relating to the Alphabond remain unchanged.

Buying a house is an expensive investment. Probably the most costly investment you will ever make in your life. Finding the right house can be an overwhelming undertaking. That is why Nedbank tries to make is as easy and painless as possible – because when your finances are taken care of, the procedure can actually be fun. Choose a home loan from four different options that are specially designed to fit your distinctive desires.

Special features

All Nedbank’s home loans have special features. NedRevolve allows you to have some control over your loan, permitting you to manage your money more effectively. This also enables you to accumulate savings – free of any taxes!

Suppose you have some money available and want to deposit it in your home loan account, but you are afraid that you might need it in the future. Do you transfer it to your home loan account or rather play it safe and keep it for in case? Readvance gives you access to the capital amount you already paid towards your home loan account without registering for a new home loan.

You are determined to pay off your home loan as soon as possible. With Nedbanks’ Accelerated Payments option this has never been easier. This feature allows reimbursing your loan in the quickest possible time.

The house you decided on may need some attention or you may want to make some alterations to it. But you already took out a home loan and don’t know how you will afford the changes to your new place. Further loan with registration is the answer to your problems. This enables you to take out a second loan especially for such needs as improving your present home.

House Owners Insurance (HOC) is a condition to every home loan Nedbank grants, and a very usefull one to say the least. Not only does it protect the bank’s interest, but it can shield you from financial loss as well. According to Nedbank’s website, HOC covers not only the property, but the outbuildings (swimming pool, garage, walls and more) as well.

When you are no longer able to pay off your home loan (in the case of death or disability), you don’t want to burden you family with it. Loan Protection Assurance ensures that it is not required of your loved ones to take over the loan repayment.

What home loan options are available?

According to Nedbank’s website their ordinary residential home loan is a flexible home loan that can be tailored to suit your individual needs. It can be used both for buying an established residential property or vacant residential land. The minimum amount you can borrow with the ordinary residential home loan is R100 000 for a term of up to 30 years. The maximum amount available on this option is up to 108% of the property value. To make things even more convenient, you can choose between fixed or variable interest rates.

Nedbank acknowledges that first time buyers are even more daunted by buying their very own place. And with this in mind they specifically designed Alphabond. This home loan provides you with the money to pay initial costs and help with cash flow. You can even take a three-month holiday from reimbursing your loan – giving you time and money to decorate your new house. You can borrow a minimum amount of R100 000 over 360 months and loan up to 108% of the property value. The option between a fixed or variable interest rate is available and what makes this loan even more impressive is that you can organize a rate concession once the loan is paid off up to under a 100%. Readvance (access to the capital amount already paid into your home loan account) is only available after tyour loan value falls below 100%.

As you climb the ladder of success or move through life, your needs change. Chances are that you want to move to another neighborhood. Or the pitter-patter of baby feet begs for more space. Whatever your reasons, BoosterBond literally allows you to boost your home loan – with a minimum amount of R500 000 and a maximum of 104% to the property’s assessed value. You have to earn a minimum gross income of R20 000 per month to qualify for this loan. Nedbank also requires of you to take out Rate Protection Insurance. This means your interest rate is fixed for five years. According to the website this will protect you against rising interest rates – giving you peace of mind against interest rate volatility. NedRevolve, Readvance, Accelerated Payment, Further Loan with registration, Home Owners Insurance (HOC) and Loan Protection Assurance are all available on this home loan option.

You know exactly what you want, but cannot find it anywhere? Building the home you dreamt about for so long are now possible with Nedbank’s building loan option. It is a mortgage loan that finances the construction of a new residence or improvements to an existing one. The bank monitors the building project to ensure that it is finished within a reasonable time and the loan is paid out as the building process develops. You have access to all the features available on other home loans.

Once you have decided what Nedbank Home Loan you require, you can apply online and let SecuBond arrange your loan for you. They will offer you a better rate, professional advice and prompt service, all free of charge to you.

Online Home Loan Application