Up to 12 people will now be allowed to apply for one home loan thanks to FNB.
This collective buying home loan scheme is a first for the South African market. With the launch of this product, the bank hopes to help solve the challenge of the constant shortage of affordable housing in the country.
With new houses being too expensive on the one hand, and banks being too scared to lend money to middle low-income earners on the other, the affordable housing problem is becoming worse.
FNB’s product seeks to solve the financing challenge. The bank will allow as many as 12 people to come together to apply for a bond. Buyers can team up with eight people, including spouse, when applying through digital channels, or 12 if they apply in a branch through a sales consultant, reports News24.
It’s up to the group of consumers applying together, to determine how much each of them will contribute towards the monthly instalment.
While each consumer can decide how much they can contribute, it’s important to take note that if one of them defaults on their payment, the entire group will be held accountable for the bad debt.
The topic of home loans has been a touchy subject for many South Africans with the four big banks being able to pick and choose who they want to lend money to. Capitec recently shook things up when they entered the home loan market.
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