Mortgage guarantee fund ‘liberates’ buyers
http://www.iolproperty.co.za/roller/news/entry/mortgage_guarantee_fund_liberates_buyers
Developers should be jumping for joy at the prospect of thousands of new home buyers recently “liberated” by the introduction of a state mortgage guarantee fund, says RealNet chief executive Tjaart van der Walt.
“The fund is specifically intended to give the banks more confidence about granting home loans to people earning R3 500 to R9 000 a month – and there are thousands of salary-earners, such as police, teachers and nurses in this bracket who were previously shut out of the market.
“However, there is a limited amount of stock available that would be affordable for such buyers and that should spur developers into action. At current interest rates, people earning R3 500 a month, for example, could probably only afford bonds of around R108 000. Assuming they pay a 10 percent deposit, that would mean they could possibly buy properties costing around R118 000.”
(via Instapaper)
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