Absa addresses the challenge of affordability with the launch of its Home Loan Estimator.
The Absa Home Loan Estimator offers a superior solution to other similar offerings currently available in the market in that it
• Authenticates the customer’s identity by asking them five random security questions before access is granted to the Home Loan Estimator process;
• Empowers both existing Absa and new-to-bank customers to view their Absa Home Loan credit rating out of 10;
• Provides customers with practical tips on how to improve or manage their credit rating and finally;
• Sends the customer a certificate that’s valid for 90 days showing what they potentially could qualify for early on in the home-buying process.
Consumer research recently conducted by Absa confirmed that affordability remains the foremost consideration for anyone contemplating buying a home in South Africa.
Prospective buyers not only have to consider the sheer size of the transaction and the duration of the commitment, but also the associated risks and their ability to service the home loan consistently over a long period of time.
“Despite its importance, affordability is often poorly understood. It leads to anxiety as well as inefficiency in the pre-buying and property searching phases and potentially places the customer’s financial wellbeing at risk. Aspiring home owners regularly apply for a home loan without fully understanding or disclosing their current financial commitments and without grasping the full impact that the monthly instalments could potentially have on their longer-term financial welfare,” says Carel Grönum, Managing Executive of Absa Home Loans.
With the launch of its Home Loan Estimator, Absa is now making the home-buying experience smoother and less stressful for aspiring home owners.
The Home Loan Estimator is a practical and innovative add-on to Absa’s popular Homeowner App, and provides customers with a realistic view of the size of home loan they potentially could qualify for early on in the home-buying process.
The Home Loan Estimator also empowers customers to view their Absa Home Loan credit rating and educates them on how they could improve their individual credit score. “This is an added and unique feature to help customers understand the state of their current credit profile and provides them with great tips on how to improve their rating, thereby increasing their chance of qualifying for a home loan that’s within their means,” says Grönum.
After completing the Home Loan Estimator process, qualifying customers receive a certificate via email, confirming the loan amount they could qualify for. The certificate is valid for 90 days and can be presented to estate agents when viewing and considering properties. Customers are allowed to apply for a maximum of three certificates in a 90-day period.
The newly launched capability has been introduced as part of Absa’s ongoing commitment to responsible lending practices. “Since the National Credit Act came into effect in 2007, the bank’s credit assessment processes have changed significantly from the simplistic repayment-to-income measurement to a more realistic and holistic understanding of a customer’s financial circumstances,” Grönum says.
“We have found that customers often have a different understanding of their own financial situation than their bank, and the introduction of the Home Loan Estimator is yet another way we are investing in product development, process improvement and customer education to provide customers with a more realistic view of what they can afford.”
While innovation and disruption is reshaping the financial services industry, home buyers’ searching patterns have also become more reliant on technology with a consistent increase in the use of smartphones or tablets to find suitable properties. The majority of marketed homes are now listed online where buyers can learn everything about a house before they even set foot in it.
In response to evolving customer needs, the introduction of the Home Loan Estimator forms part of Absa’s focus to delight its customers as it offers them a simple and convenient banking experience, from start to finish and in real time. “The Estimator will further assist with creating the kind of banking experience that prospective home buyers deserve, faster and more effectively than we’ve ever done before,” says Nondumiso Ncapai, who has been spearheading the development of the Home Loan Estimator on behalf of the bank.
With security considerations paramount, customers using the Home Loan Estimator can rest assured that all information provided is kept secure and confidential. Absa validates their identity by requesting them to complete a series of five security questions before access is granted to the Home Loan Estimator process.
The Home Loan Estimator can be downloaded for free from Google Play or the App Store and is available to new and existing Absa customers as well as customers who bank elsewhere. All you require is a valid South African identity document and certificates can be issued for both individual and joint applications for up to two applicants.
The Home Loan Estimator complements Absa’s raft of initiatives to educate customers, including its face-to-face Borrower’s Education - which over 30 000 consumers have benefitted from - and its educational YouTube videos tackling complex topics relating to home loans in a simple and visual manner.
“Customer education is a critical concern for Absa, and the Home Loan Estimator will be used as an effective tool to educate and assist our customers to better understand and improve their unique financial circumstances before buying a home,” adds Ncapai.
In addition to the Home Loan Estimator, prospective home buyers can also opt to make use of the bank’s enhanced Homeowner App to conduct property searches, rate properties, calculate home loan repayment costs, determine rates, levies, moving costs and transfer duties.