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More home loans mean more home insurance policies
Tuesday, 15 September 2009 08:35
Being the proud owner of a home loan earns you one household insurance policy of your choice. Compulsory in South Africa, home insurance for financed homes might mean more business for short-term insurers as more home loans are being approved according to recent statistics. By August more home owners were paying smaller deposits as a percentage of the purchase price of the house. Add to this the increased number of approved mortgage applications and short-term insurers may have the break they’re looking for.

According to Rhys Dyer, chief operating officer of Ooba (mortgage originator), the number of approved loans indicates greater competition between banks less fear of lending and consumers diminishing apprehension towards borrowing. The current interest rates also make home loans more affordable.

In July the deposit of a home was 24.2 percent of the purchase price as opposed to the 23.1 percent in August. During the same periods, 52.7 and 54.9 percent of home loan applications were approved respectively. Recent relaxed lending criteria means that these numbers will, in all likelihood, increase in the near future, despite the 6.9 percent increase in house prices between August 2008 and August 2009.

Dyer states that the figures indicate that the crisis in the local housing market is over it’s worst and the recovery will be relative to the banks lending policies.
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