FNB has introduced an industry first in South Africa – collective home loan applications whereby up to 12 people can be included in a single application.
In a statement on Thursday (18 August), FNB Retail CEO Raj Makanjee said even though interest rates are at record lows, the COVID-19 pandemic’s economic impact has made it difficult for many South Africans to afford properties.
Bridging market gap
“Through the launch of the Collective Buying solution, we aim to bridge the gap in the market and to help all customers realise their ownership dreams with ease,” Makanjee said.
FNB Property Finance CEO Lee Mhlongo added that most property buyers often forget to factor in additional costs in their home loan applications. These include registration costs, transfer duties and sometimes a deposit.
“The advantages of buying a property collectively with friends and family means that customers are now able to share the costs equally to make the purchase and the process affordable. Another advantage is that customers will also enjoy reduced monthly repayments and personalised rates,” he explained.
Although the new product is primarily aimed at the affordable housing financing market, it is also open to more affluent FNB customers.
FNB collective home loan: How to apply
To start an FNB collective home loan application, customers can use the FNB app on nav »Home. The app is available on the App Store (iPhone users), Google Play (Android smartphone users) or AppGallery (Huawei).
Application via the app allows up to eight applicants, including spouses married in community of property, to be added. If there are more than eight applicants (maximum of 12), the application will be done at your nearest FNB branch.
“Once the application has been submitted, the bank will review each customer’s credit profile, including the nature of income, expenses, household size and affordability. These are assessed in conjunction with credit bureau profiles and the information on the account conduct with various creditors and banks,” FNB explained.
The applicants will choose and deposit funds directly into one transactional account. They will be able to run debit orders or to request a stop order payment from their transactional accounts.
In addition, the new service allows split billing, which means the collective applicants can pay their respective contributions on different dates.
“We urge customers to take advantage of buying as a collective and start their journey to own property. This is another way we are helping our customers to own their dream home and unlock their wealth creation journey, through investing in property as a group,” Mhlongo concluded.
“Customers that fall within the ‘gap housing market’ – whose income is between R3,501 and R22,000 – are still encouraged to consider FLISP, a government home ownership assistance programme.”