YOU CAN GET A HOME LOAN

Whenever the economy tightens, it stands to reason, so does everything else. It’s perfectly possible to raise a home loan but there are definite ways to raise your chances of securing that, and of securing that home you really want 

There’s little that’s more disappointing than finding your dream home…and not being granted a bond. Home Loan lenders will obviously be looking at a host of factors when calculating whether to grant you that bond, but if you do some preparation and pre-planning before you set out to find that property, you can save yourself a lot of heartache.

Affordability

Bond originators ooba have some very nifty on-line tools to assist you. It couldn’t be easier, and the answer pops up on the screen in seconds. So, not only can you find out what size bond you’re likely to qualify for, but what all the additional costs would be too. For first time homeowners, this is important, because most newcomers to the market don’t know about transfer fees, bond registration and a host of other unknown costs which must be taken into consideration. Your bond will not cover those fees.  

Bear in mind

If you have a previous judgement against your name – no matter how insignificant you might think it was – you must deal with it.  It will undoubtedly work against your bond application. 

Prequalification is first prize

If you’re a buyer, you’re a much more attractive prospect for a seller if they know you’ve been prequalified for a bond. In other words, the bank / mortgage originator has said that, given your financial situation (salary/income/assets and so on) – and as long as nothing changes between your application and your offer to purchase - you qualify for X amount. Prequalification not only tells you what you can afford and that you’re very likely to be granted it, but it gives prospective sellers confidence in you.

Why do you want or need to be an attractive prospect for a seller? It puts you in a stronger position when you’re up against other prospective buyers of that property, who might have a weaker hand to deal than yours. The seller knows you’re able to make that purchase. It may even give you better bargaining power.

A deposit can clinch it

To put yourself in an even stronger situation, you need a deposit. Yes, the banks do still grant 100 percent bonds, but you are much more likely to get your bond granted if you have a deposit, and the interest rate you pay will be better. If you have the funds for a 10 to 15 percent deposit, use it for that purpose. It’s not advisable to apply for a 100 percent bond if you do have a deposit (and think you’ll rather hold on to that cash for other purposes). If the bank doesn’t approve your request, they will either make you a counter offer of, say, 80 or 90 percent, or, if they’re unsure of your affordability, reject your application. It stands to reason that a bank will look more favourably on a purchaser who has saved – or who commits – funds for a deposit.

Advice to a seller

When you’re presented with an offer on your property, you would be well advised to ensure that if a deposit is part of the contract – and that is first prize of course – insist on it being paid soon…within three to seven days. Then you know that the offer to purchase is a genuine one.

And if there is no deposit and the buyers is applying for a 100 percent bond, it won’t hurt to ask the estate agent presenting the offer, whether that buyer is able to make a deposit?

Give yourself the best chance

If you’re about to shop for a home, do yourself a favour. Work at getting yourself a deposit, test your affordability on the ooba on line calculator (https://indicator.ooba.co.za), and get yourself pre-approved for a loan.

Now you can enter the marketplace with confidence.