OVERVIEW
Entry Level Home Buyers
For many emerging households, it is becoming increasingly difficult to gain a foothold on the housing ladder. Fewer and fewer borrowers with incomes up to R15 000 are receiving mortgages, accounting for lesser new mortgages. A decade ago, they received more than 20% of new mortgages, according to National Credit Regulator data.
Accordingly, deteriorating eligibility reinforces patterns of inequality. This in turn undermines longer-term urban spatial integration efforts and equal access to wealth. Inadequate borrower affordability and creditworthiness are flagged as the main reasons for high bank mortgage decline rates in the affordable segment.
This "sandwich generation, middle-aged income earners" who are caring for two generations of dependants, are particularly at risk, with income growth failing to keep pace with expenditure. Over the past decade, the price of new housing has risen more rapidly than household income, amid weak economic growth, so eroding affordability.
Both "entry-and-middle" markets dilemma
Above-inflation escalation in house prices has been driven by land inputs:
- Suitable vacant land and bulk infrastructure to service it, plus the necessary development rights from local government.
- Developers are finding it more difficult to contain these costs, citing municipal process delays and infrastructure expansion budget constraints, as towns and cities swell with the ranks of an urbanising population.
- Consequences include higher price points and slowing delivery, to the detriment of emerging households.
- Re-sellers too have little choice but to adjust their expectations and strategies, as they face a sluggish buyer's demand.
Entry-middle-to-high Buyers' conundrum:
Creditworthiness affects all income groups according to the alarming decline of mortgages! It is traditionally measured by credit scores compiled by credit bureaus, which correlate positively with total credit facility granted per individual, utilisation of credit facility and demonstrated ability to service obligations.
Excessive use of expensive, unsecured credit has contributed to credit impairments for half of South Africa’s credit-active population, reducing eligibility for long-term loans like mortgages.
HOW DO WE COUNTER?
Borrower education and financial literacy are central to changing this outcome.
1. "Credit scoring" may be imperfect measures of creditworthiness, acting as a barrier to credit access for prospective buyers in general.
2. Individuals who are not highly credit-active, or who choose not to use their credit facilities, may – perversely – have lower scores than those who are highly indebted.
3. Earlier this year, Transunion revealed that use of alternative and trended data identified 3 million “thin file” consumers who were potentially creditworthy: an increase of 10% in the credit-active population.
Awareness information
4. Shrinking mortgage access is highly visible in the gap market, and it is also declining in real terms for the affluent segment. An increase of just 5% over a decade.
5. Once inflation is accounted for, a real decline of more than 30% in mortgage advances has taken place.
6. Tightening consumer credit and banking regulation (National Credit Act and Basel III, respectively), property losses during the financial crisis, and persistently sluggish economic conditions have dampened mortgage lender appetite.
Can emerging households make home ownership a reality?
Yes! With strategic partnerships between our Expert Shared Value Chain, such as:
1. MasterClass Consumer Coaches
2. MasterClass Housing Group Scheme
3. MultiNet Home Loans (Mortgage Originator)
4. Preferred Panel of credible Property Developers
5. Preferred Panel of Real Estate Agencies
6. Human Settlements and Subsidy Institutions
7. All Commercial Banks
8. Preferred Panel of Conveyancers
Our modus-operandi is teaming up with "Well-being Facilitators" within the Public and Private Sectors where we collectively deliver desirable solutions in favour of prospective Home Buyers. We are a vendor on the National Treasury Database @ registration no mentioned below
In the short term, solutions in favour of the "entry-level first-time home buyer", there is the option to take-up the "First Home Finance" (FHF), previously known as FLISP (Finance Linked Individual Subsidy Program). This being a hybrid transaction where a "bank" of choice "first have to approve the client", has caused a conundrum in the process, hence, it is imperative to deal with a Bond Originator like MultiNet through the MasterClass Housing Group Scheme to provide "home readiness and borrower coaching" and assist with:
1. Pre-Assessment for the bank portion
2. Guidance during the subsidy application
3. Liaising with the Conveyancer for a smooth outcome.
N.B.!
Should the client approach the bank directly and the application for the bank portion is declined, it is almost impossible to find a solution with the subsidy portion, or rather to resolve the reason of the bank decline? Thus, it is imperative to stay within the HOME READINESS PROGRAM to receive the relevant support.
Middle-High Income Groups
As expert ex-bankers, Group Scheme and Property Practitioners, we developed a cutting-edge turnkey solution in favour of all income groups within the Public and Private Sector where prospective home buyers enjoy permanent jobs within sustainable working environments.
Shared Value Proposition:
Employees who need to sell their homes:
1. We market and sell properties anywhere in the country and engage our network of credible property practitioners to assist.
2. Our impeccable credit-scoring and pre-assessment gateway at MultiNet Home Loans is a catalyst will help deliver credible buyers.
3. We offer the complete transactional processes, i.e., pre-assess the buyer and submit the home loan to a bank of their choice, nominate our panel of conveyancers at discounted fees, and assist with the "Seller's Property Disclosure" requirements and other.
4. We will assist the employee-seller with contingency housing plans to either rent a suitable property, or purchase a suitable and affordable property. We will offer similar services that we offer buyers.
6. Our commission rate to market and sell a house is below market value @ 6% plus VAT only, a saving of 3% average.
Employees who need to purchase homes:
A. Offer our services to source a FHF (First-Home-Finance) government subsidised property, supported by a hybrid loan (partly bank loan and partly subsidy).
B. Or, source a conventional property amongst any typology, such as new/existing developments, or outside developments.
C. Apply the same services offering in in point 3 above.
Prospective employee-home-buyers in financial distress
7. We will assist clients via our Credit Repair & Rehabilitation Program, which is not "Debt Relief"! But an educational and debt settlement program with services supported by our Legal Panel.
8. Once clients are rehabilitated, we will follow the "buyer" steps above.
Government Commissioning
During the 2007 Financial Year, a report on the indebtedness of public servants was issued by The Public Service Commission to alert well-being divisions within the sector to embark on an EAP (Employee Assistance Programme) with a key focus on a legislative framework to support employees with debt management. Unfortunately, the latter is not a sustainable solution to assist the prospective home buyers to acquire a mortgage
Rosemarie - Program Director
Program specialist skill sets
- HR Well Being Specialist (ABSA 1985 -1989)
- Trainer and Developer (ABSA - trained Real Estate Agents the Property Multi-Listing Software Product, 1989-1992)
- Property and Home Loan Specialist (Nedbank, 1995 -2000)
- Group Schemes Specialist to Corporate SA (Nedbank, 2000 - 2003
- Business Owner, 2003 to date, specialising in:
- Property Practitioner, Consultant /Marketing & Sales (FFC No above)
- Bond Originator (pre-assessments, credit repair & rehabilitation/submissions )
- Job Ready Coach & Recruitment Practitioner for University Graduates
Let us help you realise your property acquisition right here!
AD - HOC SERVICES
Mental Health Support
- Once again, an unprecedented group of consumers are suffering from mental distress as a result of the ongoing economic uncertainties. Thus, our Spiritual Chaplains / Well-being councillors / And Psychologists are all on standby to provide their services.
-You may select such service on the Needs Analysis Template that we provide in your registration pack.
For more information about the full Program, please email: rosemarie@multinetmortgages.co.za
Or WhatsApp us @ 0846852513