Alternative financing option for buyers who do not qualify for a conventional home loan.
Category Property News
Bond originators ooba and BetterLife Group, partnering with Sentinel Homes, have extended their range of home financing options to better meet the needs of people who struggle to obtain home loans from banks.
This alternative financing option offers home buyers, who do not qualify for a conventional home loan, another financing solution and makes home ownership more accessible. This product plays a significant role in providing a solution to home finance, which falls outside traditional bank lending policies.
Typically, it is difficult for the self-employed, commission earners, freelancers, foreign income earners and expatriates to obtain home loans. Initially this product will only be available to Western Cape buyers, with plans to expand around SA in the future
There is a growing need for such products as bank lending policies have become stricter in recent years. This product provides finance of up to 100% of the purchase price of the properties, making it possible for home buyers to purchase a home when they do not have the savings to pay for both the deposit and transfer costs.
Sentinel's model is based on instalment sale finance, the same concept used to finance motor vehicles and other movable consumer goods. The buyer pays a monthly instalment for the duration of the repayment term comprising of the interest due on the principal, a portion of capital and a monthly service fee. Interest is levied at competitive interest rates linked to the prime rate. The monthly instalments are identical to what a bank's bond payment would be within the same parameters. Sentinel perform stringent financial checks on all applications before providing finance.
To qualify for an instalment sale home loan, consumers who cannot access a home loan from the bank need a good credit record and secure financial situation. The instalment must also be affordable. The home being purchased must fall in the R500 000 to R2.5 million price range and be a single title or sectional title home in the Western Cape.
As a registered credit provider Sentinel comply with the National Credit Act as well as with the consumer protection framework codified in the Alienation of Land Act and Consumer Protection Act.
For further information contact Mariana Grobler from ooba on 083 628 9907 or mariana.grobler@ooba.co.za
Author: Helen Ward