Banks increasingly reluctant to award bonds to people with even minor credit record blemishes....

Banks increasingly reluctant to award bonds to people with even minor credit record blemishes

There are, says Rowan Alexander, Director of Alexander Swart Property, increasing signs that the banks are now working to stricter criteria in assessing whether an applicant qualifies for a mortgage bond. In particular, says Alexander, they are more inclined to view any blemish on the applicant’s credit record in an unfavourable light, even if the slip-up involved a very small sum of money and was so long ago that it has been forgotten by most.

At Alexander Swart Property we had a case recently where the applicant was said to owe less than R1000. He has refused to pay the amount not because he could not afford to do so but because he disputed it. In his view it was entirely unjustifiable. However, this one solitary incident was considered sufficient to disqualify him for a bond – even though his earnings are good and he had in recent years satisfactorily paid other sums regularly on time.”

In these cases, says Alexander, the estate agent is powerless to help there is almost nothing he can do much as he would like to conclude the sale of the home in which the buyer is interested.

Is there a lesson to be learned from this incident regarding debts

Alexander says that it shows clearly that before applying for a bond South Africans should be 100% certain that there are no black marks on their credit records. Anyone interested in checking for himself his credit status as seen by the country’s registered credit bureaux should go online to www.transunion.co.za where, if he has a blemished record, this will be revealed to him at no cost.

Younger middle class bond applicants are far less afraid of debt than the older generation were, probably because they have lived most of their lives in relatively affluent circumstances. For this reason, they are also likely to have committed occasional credit misdemeanors, some possibly very insignificant. However, they should take every possible step to rectify the matter. If they do not they could end up never being home owners – and that is a scenario that should be avoided at all costs because in their old age they will probably need every asset they can get.

For further information please contact Rowan Alexander on cell phone number 082 581 3116 or by email rowan@asproperty.co.za.