Sophie Ndaba has, in both her personal and professional lives, endured some pretty terrible adversity, and she has emerged stronger for it.
After listening to or reading her account of what happened, it is easy to wonder where she found the strength to fight back and keep going. It’s probably connected to her self-assurance and the way she interacts with other people.
The upscale mansion in Johannesburg that belonged to the ailing television star Sophie Ndaba was auctioned because she was unable to keep up with the payments on her bond to Mercantile Bank.
Ndaba, who has been battling sugar diabetes for a number of years, was unable to keep up with the monthly payments on the house that she had purchased for more than R2.2 million in October of 2021. This resulted in the house being repossessed.
A fortnight ago, judgment was handed down in favor of Mercantile Bank by the Johannesburg High Court, finding the talented actor to be liable for the bank’s debts. This news brought a tear to everyone’s eye. Due to Sophie Ndaba’s inability to pay her bond with Mercantile Bank, the bank was forced to sell her opulent property in Johannesburg. Ndaba is a former television star who is currently battling illness.
Ndaba, who has suffered for years from sugar diabetes, was unable to continue making the monthly payments on the home that she had purchased with more than R2.2 million. As a result, the home was foreclosed on in October of 2021.
A week and a half ago, the Mercantile Bank was awarded judgment against the talented actor in the Johannesburg High Court, and this is when the news that broke everyone’s heart became public.
This came about as a result of her inability to make up a gap of R1 million that arose from the sale of her property. In order to make up for such a significant deficiency, the banking organization will most likely go after any further assets that she may possess.
After listening to the arguments presented by the attorneys and reviewing the evidence that was presented in the case, Judge Senyatsi issued the following ruling against the first and second respondents, finding them guilty of both joint and several liability and ordering that one of them make restitution to the other.
Payment of one million rand, eight hundred and ninety-five thousand rands, five hundred and fifty-eight rands, and eight cents]… a payment of R69 012.43, which is equivalent to six hundred and nine thousand, twelve rand, and 43 cents.
On September 15, 2016, the first and second respondents, Ndaba and her firm Sophla Trading, respectively, were described in court documents as having obtained a home loan from the bank in the amount of R2.2 million in order to purchase the residence.
They were required to make payments of R22,347 per month for a total of 240 months. Nevertheless, the former Isidingo actress violated the terms of the agreement when she fell behind on her payments and racked up more than R80,000 in arrears.
In February of 2019, the banking group instructed its attorneys to inform Ndaba in writing that she had violated the terms of the contract. This instruction was given in February 2019. The attorneys sent her a second letter on March 5, 2019, advising her that the banking group was terminating the arrangement because she had not paid the arrears even though they had previously informed her of this news.
After Ndaba continuously refused to pay the arrears, Mercantile Bank ultimately decided to terminate the contract a year later, in the year 2020.
According to the documents filed with the court, the first and second defendants refused to pay the plaintiff the sum in question along with the accumulated interest, which was calculated daily and compounded monthly in arrears beginning on January 1, 2019 and continuing until the date of payment.
The good news for South Africans looking for home loans is that banks are still lending.
According to the research of the Seeff Property Group, even with the recent rises in interest rates, the majority of activity in the residential market is still driven by first-time property purchasers.
As a result of the severe competition among banks for a share of the market for home loans, the organization observed that the pace of home loan approvals is at its quickest rate in more than a decade, and that deposit requirements have now dropped to somewhere between 6% and 7%.
Samuel Seeff, the head of the company, stated that this is being driven by the favorable climate for mortgage financing and the low interest rate, which, despite the 125 basis point hikes this year, remains substantially below the level that it was at before the epidemic.
In many circumstances, first-time buyers can still qualify for loans covering the full purchase price plus closing fees. According to Seeff, this has been an extremely beneficial change, and purchasers are continuing to take advantage of it.
According to data from the Deeds Office, there is a continuing uptick in business in the lower price bands, with almost 80% of all transactions occurring at or below R1.5 million. According to latest information provided by Lightstone, sales in price bands ranging from R700,000 to R1.5 million experienced a six-year peak in 2017.
According to Seeff, the fact that national house price inflation has slowed to around 4.55% (5% to 6% in the lower price bands) adds to the favorable buying conditions currently present in the market. This is the case even though house price growth has slowed to between 5% and 6% in the lower price bands.
“One of the reasons why there is no overheating of the market or the need to cool the housing market is because the growth in South African home prices has been substantially below that of other nations following the enormous pandemic-induced interest rate decreases globally over the last two years.”
“It would appear that the home market has made a significant recovery from the pandemic-induced slump that occurred in early 2020. The market continues to trade at pre-pandemic levels, notwithstanding a slowdown that followed the buying frenzy that occurred between the middle of 2020 and the middle of 2021.
According to Seeff, the market has reaped enormous benefits as a direct result of the Covid-19 outbreak and the ensuing reductions in interest rates. The reductions have been a significant boon, providing greater opportunities for first-time homebuyers to acquire their own properties.
Who is providing the loan?
According to Ooba Group, simply the fact that you are a devoted customer to your bank does not guarantee that the institution will provide you with a mortgage loan at a more favorable interest rate. “We continue to see different pricing decisions and credit from the banks – notwithstanding the fact that the applicant may or may not be a client of that bank. According to him, “every bank has its own set of loan requirements, and in return, banks are obligated to comply with the National Credit Act.”
“Our data for Q1 of 2022 indicates that of the home loan applications declined by one bank, 45.3% were approved by another bank when applying through Ooba Home Loans,” said Dyer. “This reinforces the importance of using a credible bond originator to apply to multiple banks on your behalf.” [Citation needed] “Our data for Q1 of 2022 indicates that of the home loan applications declined by one bank, 45.3% were approved by another bank when applying through Ooba Home Loans.”
Before submitting your application for a house loan, there are six points to consider.
- The significance of making a comparison of different interest rates
“Different financial institutions will provide you with varying interest rates. The interest rate that the bank will charge you on your home loan is linked to the prime interest rate that is set by the South African Reserve Bank (SARB). This rate may be higher or lower than prime, depending on the credit risk profile that you have.
It is possible for an applicant’s own bank to provide them with an interest rate of 7.75%, which is the current prime lending rate in South Africa. However, another bank may provide them with a rate of 7.50%, which would result in a savings of R66,240 over the course of 20 years.
- Repayment period
There is typically an option between a 20-year and a 30-year term for a home loan. A bond with a term of 30 years will have lower monthly repayments despite having a higher interest rate, whereas a bond with a term of 20 years will have higher repayments despite having a lower interest rate.
“A bond with a 30-year term will incur a higher total cost throughout its lifetime, but it will free up more of your monthly budget for you to spend on other things. According to Dyer, a bond originator may assist you in determining which option is most suitable for your circumstances in terms of cost.
- Shared ownership of the bond
“Joint bond applications, in which two or more persons apply together for a bond on the same property, are on the rise, according to the data we’ve been collecting,” you said.
When applying for a loan, it is a good idea to cast a wide net because “this procedure is more complicated in some respects as the banks look at the affordability of both/all parties,” as Dyer explained.
The rise in the percentage of bonds with a zero-deposit requirement that are being issued by banks has been a significant contributor to the continued demand for home loans.
“Of the house loans that Ooba Group authorized in the first quarter of 2022 (82%), 64% of the applications were for customers who wanted financing for the full purchase price,” which is a 5% rise from the first quarter of 2021.
- 100% vs 105% bond
You have the opportunity to qualify for a 105% bond after choosing to purchase a 100% bond first.
According to Dyer, 105% bonds typically cover the costs of transfer and bond registration, which are typically between 8% and 10% of the purchase price. These bonds are typically aimed at first-time buyers and properties with a value of less than R1.8 million.
- Interest rates that are either fixed or variable
“When you apply for a bond with a certain bank, you may be given the option of a bond with a fixed interest rate. This means that the rate will remain the same regardless of whether or not interest rates move up or down.
According to Dyer, “this helps to protect buyers from interest rate spikes, but it also means that you will not benefit from monthly payback savings should it go down.” “This helps to protect purchasers from interest rate hikes.”