Mortgage complaints up by 6%

23 February 2005, South African Broadcasting Corporation

The Ombudsman for Banking says customers complaints about mortgage issues are now outstripping ATM complaints. The number of complaints this year went to 24% compared to 18% last year.

Despite the fact that property prices have risen, South Africa's lowest interest rate in 23 years have encouraged people to look to buy their own homes. Many home buyers, nonetheless, do not always know what they are letting themselves in for. In buying a home, one can run into all sorts of headaches that he least expects. These can range from administration to transfer delays.

There is also the danger of underestimating fluctuations in interest rates, which might put one's purpose beyond his purse. The fact that the Banking Ombudsman is now dealing with more cases involving mortgage bonds reflects this trend. Most complaints are being resolved in favour of the customer.

The banks are supposed to give effective and efficient banking support to their customers. And most do. However the ombudsman believes that the banks have underestimated the looming dip in the market when assessing the value of purchased property. Moreover, with more resources put in place to beef up capacity a more user-friendly customer service could be provided.

The ombudsman has advised aspiring home buyers to arm themselves with as much information as they cab before entering into any transaction with the banks.