We are delighted to announce the introduction of Future Rental Income in the affordability assessment of a Buy-to-Let applicant purchasing residential investment properties for letting purposes. Taking Future Rental Income into account in an applicant’s affordability assessment without having to provide a lease agreement is the first of its kind in South Africa.
The future rental income solution is designed specifically for residential property
investors who already own two or more residential properties either bonded or
un-bonded, with Absa or another bank. That is, they would be purchasing their third
or more residential investment property for letting purposes, but by virtue of the
new purchase, they are unable to provide evidence of the Future Rental Income to be
received at the time of application. To overcome this challenge, expected Future
Rental Income may be included into the applicant’s Buy-to-Let affordability
The Buy-to-Let solution currently offers property and tenant management solutions to further support our customers in their wealth creation journey based on an investment in residential property. Our key partners offer great discounts to Absa Investors:
- TPN – tenant management software, leasing documents and suburb investment reports at 25% discount
- Trafalgar – tenant sourcing management for up to 50% discount on fees
In addition, investors will have access to financial planning through the WIMI Virtual Advice Team. Financial Planning is essential when striving towards achieving financial goals and the WIMI Virtual Advice Team will support our customers in reaching that goal:
- - Absa Law for You
- - Insurance and Risk Protection
- - Savings and Investments
- - Wills and Trusts
How does Future Rental Income work?
Where there is a need for Future Rental Income to support the applicant’s
affordability assessment and where proof of the expected Future Rental Income cannot
be provided by the applicant at time of application, an estimated market related
Future Rental Income may be included in the income calculation on the application.
Our credit team will then assess this for inclusion in the applicant’s affordability
As is currently, where the applicant has existing lease agreements to prove rental income and as such, where an applicant is able to provide evidence of existing rental income, the applicant must provide evidence in the form of a copy of a signed existing lease contract/agreement with supporting six months bank statements, evidencing the last six rental deposits.
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What’s included and excluded?
In terms of property types, the property can be an existing or new residential
dwelling, excluding Small Holdings, Vacant Land and Building Loans. For Future
Rental income to be used for the Absa Buy-to-Let Home Loan application, the
applicant/s must be purchasing their 3rd or more residential property.
Other Home Loan product exclusions include Private Bank Universal, First Time Home Buyers and Commercial Home Loans