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Thread: Interest rates down .5%

  1. #21
    Site Caretaker Dave A's Avatar
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    Oh yes! Another 1%
    However, Tito is not exactly upbeat about prospects for the economy.
    Reserve Bank Governor Tito Mboweni painted a bleak picture of the local economy and said all signs were pointing to a second quarter of contraction in the first quarter of 2009.

    "The outlook for domestic economic growth remains subdued, with no indications of a quick recovery," he said in a televised statement.

    "The high frequency data continue to suggest that the negative conditions recorded in the final quarter of 2008 persisted in the first quarter of 2009."

    The economy shrunk by 1,8% in the fourth quarter of 2008 and weak manufacturing output numbers point to another contraction, as a global downturn hits exports.

    Mboweni said consumer demand remained depressed and could be restrained further by falling house prices and weak asset markets.

    "The sluggish domestic demand conditions also appear to have persisted," he said.

    The central bank has shifted its focus to an ailing economy, despite inflation staying outside the 3% to 6% target band.

    Mboweni said although the near-term inflation outlook had deteriorated, it was expected to follow a downward trend and average 5,4% at the end of the forecast period in the final quarter of 2010.
    full story from M&G here
    I like the fact they are giving priority to the more pressing issue at the moment. Not the time for a narrow inflation-driven view right now.

  2. #22
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    Rates down BUT.......

    Although rates have come down considerably, Property buyers are still finding it difficult to qualify for home loans. Two years ago when rates were at current levels this was not the case.
    I believe that the National Credit Act and poor economic conditions are to blame. Self employed individuals will find it even more difficult as the banks will no longer just accept a letter from your accountant as proof of income.
    Now is no time to "go it alone" obtain the services of a professional in the field of property finance, mistakes you make now could sink future deals.
    In my opinion we will see rates below 10% before the end of the year......
    Care to comment anyone?

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    Gold Member garthu's Avatar
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    Down to 10% by december, like that thought alot and very possible in my opinion even though the sentiment for the next meeting seems to be negative...

    Get finance advice before, absolutely, as it really has changed and there is nothing simple to it anymore... HOWEVER, I think the bank might just be turning down originator deals at the moment in favour of there own direct deals. Save comm etc. Can't be sure about this just yet, but one our deals indicated this could be occurring?? Submitting by originator MIGHT be detrimental to your deal now. (please don't take for this word, an assumption on my side)
    Garth

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    Site Caretaker Dave A's Avatar
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    The medium term future for interest rates is far from clear cut.
    There are early signs the rate cutting cycle may come to a premature end. Brian Kantor, the investment strategist at Investec Private Securities, said yesterday that the Johannesburg Interbank Agreed Rate (Jibar) - the rate at which banks lend to each other - was signalling there would be no further rate cuts in the next six months.

    This comes after a 1 percentage point cut in the Reserve Bank's repo rate last week - and when economists are predicting several further cuts, possibly to as low as 6 percent.
    full story from Business Report here
    One problem is inflation. CPI remains stubbornly high while PPI has been falling quite rapidly.

    Another is the more fundamental driver of supply and demand. If cash for interest bearing finance funding is tight, this puts upward pressure on lending rates. To some extent we're seeing that effect already if we look at current vehicle and bond rates for new deals when measured against the REPO rate.

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    Quote Originally Posted by QUINN View Post
    Although rates have come down considerably, Property buyers are still finding it difficult to qualify for home loans. Two years ago when rates were at current levels this was not the case.
    I believe that the National Credit Act and poor economic conditions are to blame. Self employed individuals will find it even more difficult as the banks will no longer just accept a letter from your accountant as proof of income.
    Now is no time to "go it alone" obtain the services of a professional in the field of property finance, mistakes you make now could sink future deals.
    In my opinion we will see rates below 10% before the end of the year......
    Care to comment anyone?
    Hi Quinn - what do the financial institutions want now as a proof of income from a self employed person?

    ...

    Yup, I also think the interest rates will decline even more.
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    Quote Originally Posted by garthu View Post
    Down to 10% by december, like that thought alot and very possible in my opinion even though the sentiment for the next meeting seems to be negative...

    Get finance advice before, absolutely, as it really has changed and there is nothing simple to it anymore... HOWEVER, I think the bank might just be turning down originator deals at the moment in favour of there own direct deals. Save comm etc. Can't be sure about this just yet, but one our deals indicated this could be occurring?? Submitting by originator MIGHT be detrimental to your deal now. (please don't take for this word, an assumption on my side)
    You are right that is the case.
    To many "out of work individuals" tried their hand at bond origination and now the banks are GATVOL.

    if you deal with a person with many years experience in the industry and contacts built over many many ,.....many long nights it should not be a problem.
    I make a point of having a personal relationship with the key people in the banks

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    Quote Originally Posted by Debbiedle View Post
    Hi Quinn - what do the financial institutions want now as a proof of income from a self employed person?

    ...

    Yup, I also think the interest rates will decline even more.
    Debbie
    Your income will have to be audited. Example: Your income should be in relation to your turnover and your tax returns should match your stated income.
    In addition your bookkeeper can no longer be your brother's girlfriend, the banks will only recognize accountants from registered bodies.
    Not a train smash if you know what you are doing.
    If any one plans to buy they should start by getting their ducks in a row.
    Step 1 Appoint a good mortgage advisor

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    Hi all

    I have just come out of the MO industry, and for the uninformed, according to the NCA all MO's need to state on registration how much comm has been made from the deal. Plus with all the court battle's with SBSA and OOBA, who knows where the industry will end up. As for the other remaining banks they have all cut rates that they pay to the MO's. so the industry will certainly get smaller. although at teh moment most banks are only condisering deals where their LTV is 85 to 90%, as if you are buying a home, you would need 10 to 15% deposit. Plus as someone self employed, why would they need to change their own requirment of 6 months of banks statement. They then look at the average income earned, and the amount spent. There is so much more to the Industry and one thinks, so many people got involved becuase it was such a low cost point to entry, which IMO has given some concern to the banks.

    I think the SA market should consider using a model as in Oz, Lower the comm % and pay out income as the loan runs. Cuts back on switching, plus we shoudl also do away with comm to estate agents.

    well that is my 2 cents worth.

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    Quote Originally Posted by Wukkie View Post
    Hi all

    I have just come out of the MO industry, and for the uninformed, according to the NCA all MO's need to state on registration how much comm has been made from the deal. Plus with all the court battle's with SBSA and OOBA, who knows where the industry will end up. As for the other remaining banks they have all cut rates that they pay to the MO's. so the industry will certainly get smaller. although at teh moment most banks are only condisering deals where their LTV is 85 to 90%, as if you are buying a home, you would need 10 to 15% deposit. Plus as someone self employed, why would they need to change their own requirment of 6 months of banks statement. They then look at the average income earned, and the amount spent. There is so much more to the Industry and one thinks, so many people got involved becuase it was such a low cost point to entry, which IMO has given some concern to the banks.

    I think the SA market should consider using a model as in Oz, Lower the comm % and pay out income as the loan runs. Cuts back on switching, plus we shoudl also do away with comm to estate agents.

    well that is my 2 cents worth.
    Hi WUKKIE
    I have been in the financing for 10 years and sen the good and the bad.
    The banks are shooting themselves in the foot by biting the hand that feeds them.
    Before MO they had mortgage centres (Unproductive staff to pay, leases and office overheads. The 2 % per deal they paid us was a small price to pay. I agree they should not have been pressed for more money. I rather ad value to my offering, the 2 % was just a bonus.

    With regard to "loan to value" this does not present a problem for the client that can afford to buy a home. As an experienced agent we can get around this.
    In actual fact a new home owner has to make provision for 10 % deposit and 8% costs.

    With regard to self employed people I welcome the stricter requirements, to many business owners handle their finances terribly and never keep proper books.
    This makes it impossible for me as a MO to get them a home loan or to re finance, as a business finance originator it makes my job much worse and as a business broker it is impossible to value and sell that business.
    In my opinion they must do away with Close Corps as it is a nightmare to arrange funding.

    Switching IS THE ESSENCE of the MO business, how can you make the banks compete without the threat of losing business.
    I have a real issue with paying intro comm to estate agents. If you are a purely MO then you must earn your comm. They agent gets to sell his property and the reward is there. The practice of paying EA for business was a mistake by "green" MO as they did not have the experience to ad value to the deal it was just easier to offer cash.
    Now the dog is eating the owner.
    I originate my own funding and offer no comm to other agents.
    If they dont get funding for their sale the deal is dead in the water anyway and if they are so short sited they they deserve to loose the deal. But I guess the market will get rid of all the bad agents and MO.

    Hopefully the "in it for a buck" guys will stay away when things change.
    I have never had an issue with a client paying for my services and in actual fact charged some of them exstra.

  11. #30
    Gold Member garthu's Avatar
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    Not pay the agent... NOT PAY THE AGENT,,,, Huh...

    Yup you right though. If i'm not mistaken it is in breach on code of conduct anyway. Funny no one has ever really been able to answer WHY as t how the banks/MO/agents get away with it... everyone seems to avoid the question hot rock style.

    Also didn't know you did MO. We are making some hectic changes at the moment, please PM your info and also whats your current % success at mo. We may be looking at new MO's very shortly...
    Garth

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