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Karen Wheller

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Home arrow Blog arrow No more 108% bonds for first time buyers
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No more 108% bonds for first time buyers

I just read an update from a bond originator friend that sends us updates from banks as he received them.

It looks like there will be no more offers of 108% bonds to first time buyers. Like the prices are not high enough for first time buyers to enter the market, now there will be no more all inclusive bonds either, well not at least from this bank.

This is going to make buyers even scarcer. And if that is not enough, by what I hear, also the first time buyers that get the 100% financing has been restricted to 1 million, ouch.

But as it goes with down-markets, that is not all, I hear now vacant land LTV ratio was reduced to 75%.

All said and done, the buyers are just thinning out some more and I think that is just the beginning.

We are seeing bonds rejected left right and center and the 100% loan offers reducing by the day with all banks.

The sad thing really is not for the investors, because if they were smart in the past, they prepared for these conditions. But the first time homeowners will suffer the most as the market is closing before them and there is not much they can do. Even though now the bargains are more available the funding is less.

My personal opinion, this is not very fair, as times like these could enable first time buyers to get into the market at affordable prices and buy bargains.

If you want to get all the bonds updates and stuff like this, my friend Donnie Claassen is posting them on the forum on Property Investor Network as he gets them from banks. Last article he posted was on Bond Financing and explained the differences between ABSA buy-to-let offering and Nedbank.

 

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Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved.

 
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