Given the stringent National Credit Act (NCA) in South Africa, coupled with the fact that we are emerging from a worldwide recession, the current lending climate can make it difficult for potential homebuyers to secure a home loan.
Below are some pre-purchase checks to help you improve your chances of ultimately securing a bond and in doing so – finalizing the purchase of your desired home!
Know what home loan you can afford…
Before you even begin househunting, make sure you have clarity on the home loan you can afford. The National Credit Act requires banks to assess your net surplus income when determining what loan amount they will offer you (banks do however limit lending to 30% of gross income in circumstances where the net surplus income value is higher).
Keep a clean credit history…
Before qualifying you for a home loan, the banks will assess your credit history. Have you defaulted on debt in the past? Are you presently in arrears with any repayments?
If possible, put down a deposit…
Statistics show that home buyers who are prepared to put down a deposit are more likely to have their bonds approved. A deposit could also result in a more favorable bond rate, which will save you in interest over the term of the loan. Sellers are often more willing to accept an offer if the buyer has a deposit as there is a greater chance that they will complete on a sale.
Use an expert originator to submit your bond application…
Using an expert originator gives you the best chance of approval and enables you to secure the bond rate. They can make multiple simultaneous bank submissions and have in-depth knowledge of each bank’s specific requirements.
As a single point of contact throughout the entire process, an originator cuts down on time and inconvenience for you. Overall, giving you the best chance of securing your dream home!
