Absa’s New Credit Lending Policy!

Followin on my previous article (Absa Home Loans), I thought I'd share a little more light into Absa's credit lending policy changes.

ABSA have announced that with effect from Monday, 12 May 2008, the following maximum permissible Loan to Value ratio’s will apply:

R0 â€" R800 000 : Maximum LTV = 100%
R800 000 â€" R2.7m: Maximum LTV = 95%
R2.7m â€" R4m: Maximum LTV = 90%
R4m: Maximum LTV = 85%

Vacant Land (irrespective of Loan Amount): Maximum LTV =75%

In circumstances where the applicant is able to cede suitable collateral security to the bond, thereby reducing the risk to the relevant maximum permissible level, ABSA may consider approving a higher loan amount.

ABSA will not entertain any cost inclusive loans, i.e. where the risk will exceed the above maximum LTV’s, with the exception of ABSA’s My Home product, where cost inclusive loans to qualifying applicants will still be considered.

Applications which are in excess of the above permissible LTV levels will not be submitted to ABSA.