While buying a new home is exciting, it can also be overwhelming – especially when it comes to that all-important home loan application. A little preparation and having a professional on your side to help navigate the finer details of the process can go a long way in saving you time while getting the best deal possible says Marcél du Toit, CEO, Bondspark.
When assessing a bond application the overall picture of the client’s credit history is taken into account, making it very important for prospective buyers to be prepared. “In general, for people applying for home loans, affordability and credit rating are the two key requirements. Your home loan instalment may not exceed 30% of your gross monthly income. Banks look at what expenses you have and what credit you owe to work out if you will have enough money to pay off your loan. A credit scorecard or profile affects your ability to get a home loan. This is based primarily on your historical credit conduct recorded with the Bureau.”
Du Toit says many buyers do not regularly check their credit record and don’t realise that seemingly minor things like late payments can count against them. “Often banks will pick up issues like unpaid debit orders that clients were simply not aware of. By paying attention to their credit rating and keeping all accounts up to date, buyers remove the biggest stumbling blocks to a successful home loan application.”
Aside from maintaining a good credit score, it is also advisable to save up for the extra costs involved in the bond process such as the bond initiation and transfer fees as well setting aside as much for a deposit as possible, as this can reduce the interest rate or repayment term.
“We advise our buyers to have a clear understanding of their budget before buying a new home,” says du Toit. “Calculators on the Bondspark website can help you check your income and expenses and see what you can realistically afford. The best advice we can give you is, to be honest, and realistic: over-declaring and under-declaring expenses will only make the banks scrutinise your bank statements more closely and take even more time to finalise the application.”
Using a reputable bond originator like Bondspark when applying for a home loan is also a wise decision; not only is this the more convenient hassle-free option but also enhances the possibility of getting a better home loan deal. “There a few things people don’t realise until they start the buying and home loan application process. The number one thing is to know your affordability. Bondspark can do a pre-qualification for you that can help you understand your affordability and credit score. It need not be a scary exercise when you have professionals to guide you through the process,” says du Toit.
