select
|

Five ways to shorten the home loan application process

Good preparation is the key to success in most endeavours – and home loan applications are no exception, says Shaun Rademeyer, CEO of Better Life Home Loans, SA’s biggest mortgage originator.
 
Although you can expect your mortgage originator to ask you lots of questions, he says, you can make the process easier and faster if you have the following information and documents ready:
 
*Your credit record. You are entitled to a free credit report every year and it is a good idea to get yours and check it well before you think of applying for a home loan, because you may need some time to clean it up. It is definitely worth doing this and improving your credit rating, as that will usually not only improve your chances of being approved for a home loan, but also of securing a better interest rate – and that can save you many thousands of rands over the life of the loan. In addition, you need to remember not to apply for any new credit until your home loan application is approved and your new home is transferred into your name.
 
*Proof of income. You should be prepared with payslips, copies of work contracts and any other documents that can help verify your income from employment for the past two to three years. If you are self-employed, you will also need both personal and business bank statements and financial statements for that period. In both cases you should also bring your latest tax returns and assessments and if you have any other sources of income, such as rental property, alimony, investments or a home-based business, you must also declare them.
 
*A list of your current debt commitments and living expenses. What lenders want to know is if you will have enough of your take-home income left after these monthly payments to be able to comfortably afford the mortgage instalment. So in general, the more debt you have, the less likely you are to be approved for a home loan. Debts and expenses to put on the list include student loans, car loans, credit card and store card balances, rent, school fees, utility costs, medical aid contributions, insurance premiums and your monthly transport and food costs.
 
*Proof of cash reserves and other assets. Your mortgage originator will need to know how much cash you have available for a deposit on your chosen property as well as the additional costs of a home purchase, such as bank and legal fees and any transfer duty that may be payable. The bigger your deposit, the more likely you are to qualify for the loan, and the more likely your application will be approved, because lenders like it when homebuyers commit some of their own money to the purchase. If you have other assets such as a rental property, holiday home, share portfolio or valuable collectibles, you should also list these.
 
*Use of property. This will probably not be an issue if you are planning to use the property as your primary residence, but if you are buying it in order to rent it out, you should provide a copy of the current lease, or an estimate from a recognised managing agency of the rental income you are likely to receive once the property is let. The banks use different credit criteria when assessing loan applications for secondary properties – and those for vacant land on which the purchaser intends to build or develop. To get you the right loan, your originator needs to know what your plans are.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK