Financial Credit Rehabilitation Minimum Criteria
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Blacklisted Finance Pre Qualification
The details below outline the minimum criteria our bankers apply when assessing applications.
What we are trying to achieve is Financial Credit Rehabilitation using the equity (value less outstanding bond) in a clients property to settle debt and then rehabilitate the client to normal credit standing. Once rehabilitated, the client is able to apply for a further bonds, loans and credit.
1. Administration Order: We can NO LONGER assist clients that are under an Administration Order with this product.
2. Bonds Statements: If bond repayments over the last 12 months are in arrears we cannot assist with this product.
3. Market Value of home Minimum home value to be more than R 100 000.00
4. Affordability: One broad method of calculating affordability is the 30 % of gross income criteria and the second would be the residual income method. In addition a full assessment of the clients ability to meet repayments is done before credit is granted.
5. Property Value: An official valuation will assist in determining true value but if not available then the clients' or an estate agents estimated current value of the property will do for the Pre -Qualifying submission. Our bank valuators will do the final valuation. Minimum available equity (after outstanding bond deducted must be R 60 000
6. Loan to Value Ratio: The Loan to Value Ratio cannot be more than 65%. This means that the lender will not lend more than 65 % of the value of the property. Example Value R 500 000. LTV = R 400 000. Debt, existing bond, mandate fees, legal fees and bond registration costs are not to exceed R400 000.
7. Total Debt: Outstanding Bonds, Bond Registration costs, Legal Fees and Mandate Fee are not to exceed the 65 % Loan to Value Ratio. Debt can include all credit cards, judgements, garnishee orders, summons and arrears payments on accounts, school fees, micro loans, rates, motor vehicle leases and any traceable debt .
8. Minimum Income- At present the lowest single income to be more then R 3500 pm and combined income R 6000 pm. If another family member is available to stand surety, then incomes can be combined to increase the affordability level.
9. Commercial and Agricultural - We cannot assist this category of client on the Blacklisted program. Gentleman's residences (residential zoning) under 8,5 HA can be bonded, if income is not dependent on agricultural activities.
10. Commission Earners - A minimum of 6 months bank statements are required.
11. Fringe benefits are to be proved
12. Weekly Paid= 24 pays slips Bi-Monthly = 12 pay slips required.
Costs to the Client:
Costs are not payable up front and will be deducted from the equity in the property on registration.
1. Mandate Fee:
See ScheduleApprox 12,5 % on R 50 000 down to 3 % on R 1 million calculated on the 2nd bond
2. Bond Registration Costs:
As per banks and attorneys schedule of costs.
3. Rescinding of Judgements:
R 850.00 each
4. Debt Payments:
R 250.00 per account
If the client meets the above criteria, then we will require the following to do a pre-qualification assessment:
- Clear copy of ID document
- Payslip (stamped by employer)
- Client signed mandate to undertake credit checks
If available then please include the following :
- Latest Bond Statement
- Latest Bank statement
- Municipal : Rates or Water Statement
- Letters of settlement and Garnishee orders
Should all the other information we require be readily available on our IT systems, then within 45 days we will advise you whether the client has passed the pre-qualification stage or not and all further docs required.
Please be cautioned, that due to the nature of this category of application, the process is not as fast as normal bond applications. We are undertaking Credit Rehabilitation and financial planning and this has many other facets to it, that normal bond submissions do not have.
NOTE : Lenders conditions can change without notice. Each application assessed on its own merits. The lender reserves the right to decline any application.
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