Can you believe it the first month of the year is nearly at an end and I trust you all had a good rest over the festive period.
I thought I would share some new information with you that has just come to light and may not be common knowledge to all.
In the past you could “generate” income via a Trust to boost your income and therefore be able to qualify for larger bonds with the banks. The banks have become very strict on what they accept as income. Before they will accept it, they do some serious investigation first. The original concept of flowing the same money around is no longer effective. They want to see more substance, such as available equity or funds invested in Money Market accounts.
At this point in time the banks would only start looking at this if the Trust has been ‘trading” for longer than 2 years and the cashflow is of such a nature that these distributions are sustainable.
Yup, with a swish of the tail the policies change overnight and at this stage the banks are as confused as a chameleon on a Smarty box. Rumours are that the banks policies will be in place by the end of February and things should start settling down.
One thing has come through very strongly and that is that the criteria for obtaining finance have become much stricter and going to worsen as time goes on.
My prediction is that South Africa is going to become like the rest of Africa unless the policies change. Ten percent of the people will own property with the balance renting.
On the other hand………. We could be that 10% ?
Trust you have a wonderful day.
Andre
