The Financial Coach

MANAGING PEOPLE AND THEIR EMOTIONS AROUND MONEY

Fawlty algorithm?

There must be something seriously flawed with the banks’ home loans risk algorithm. I recently encountered a situation where a self employed business person tried to apply for a bond on a new property. They have an excellent credit record and have run a successful (and very profitable) business for almost 20 years…but because they …

More bad business…

Flipping banks! Was chatting with a client yesterday who was relating his sorry tale of applying for a bond…here are the facts; you decide if this is ok! Net income – R45000, bond applied for R1075000 on 10th Jan 2011 (house value – R1.56million, deposit – R485000). The banks replied as follows: ABSA – “our …

Banks should be ashamed…

I spent some time with clients recently working out what sort of bond they should be able to afford…they had seen a house they liked and wanted to put in an offer (subject to bond approval). Here are the facts: Cost price: R850000 Deposit: R450000 Bond required: R400000 (maybe a bit more if allowed for …