Found that perfect new home or still looking for a home to buy?
Finding a Home Loan to suit your needs will be an important step since your Home Loan will typically be the biggest debt you will ever have. Helping ensure that once you apply for a bond you are then approved is obviously a key component.
What you will need when you apply for a home loan?
Financial institutions will want to be sure you can afford the loan, so you will need to show proof of your income, normally by providing three months bank statements. Your risk profile will be scrutinized and providing your ID Number and ID Book will allow the finance company to run a credit check on you to look for things such as bad debts, any poor re-payment history on credit and store cards, and other factors that may be against your profile such as court judgements against your name, and so on.
Your home loan deposit amount, calculated as a percentage of the property value and also known as the “loan to value” calculation will play an important part, since the bigger your deposit in relation to the property purchase price, the more equity you will be putting into the property. The deposit amount will offset the amount of interest that you will need to pay over the life of the loan.
Where to get the best Home Loan for your needs
Like most things it always pays to shop around to get the best deal by comparing what each home loan provider can offer you. The interest rate on the loan is a key component for how much the total interest portion over the life of the loan will be.
Obviously increasing your chances of getting your home loan approved in the first place is important so choosing a reputable lender is important too. Home loan approval rates can differ considerably from 60% to over 75%.
Most bonds in South Africa are processed on the home buyers behalf by a Bond Originator the use of which can make getting your bond sorted quicker, easier and more hassle free. The bond originator will help guide you through the process and help you get the lowest interest rate. Only if the bond originator you choose is successful with your approved application do they get paid by the banks, thus ensuring you get good service all along the process.
You can also of course choose to arrange your bond application directly with your existing bank or any one of the big banks in South Africa. Often times it can be easier to work through your existing bank since you may have relationships with a client manager already. Sticking with your existing bank may not always be the cheapest option.
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