Home loans in South Africa may be obtained for various types of real estate property, such as flats, town houses, cottages, small agricultural holdings and large farms. The title deed of a property is held by a South African bank (home loan lender) as collateral, till the full payment towards the principal and interest is completed

Home Loans South Africa: Pre-Qualification

A home loan pre-qualification is a certification of a borrower’s capacity to repay a home loan. This certification is valid for a couple of months. It also states the maximum home loan amount a borrower can bear with ease. A credit check is carried out, with the individual’s consent. The purpose is to draw up a pre-qualification certificate. Income, which may be individual or joint, is the primary factor taken into consideration for a pre-qualification certificate.

Being a quick procedure, pre-qualification helps to narrow down properties that fit one’s budget and avoid denial. Pre-qualification also speeds up the procedure of home loan approval as it convinces sellers to grant loans when an application is backed by this certificate. Applying for a pre-qualification certification does not oblige an individual to apply for a home loan. Its basic purpose is to serve as a tool that helps to determine an individual’s borrowing ability.

Home Loans South Africa: Special Services

For assistance with home mortgage application and procurement, the home loan borrowers in South Africa can opt for the services of a bond originator or mortgage broker. These are banking experts who have a complete grasp of the home loan industry and general market conditions. This high-level expertise of a bond originator helps in finding the most lucrative loan terms and interest rates. Besides, a bond originator’s services are free at Mortgage Plus cc

Home Loans South Africa: Tips

Borrowers must first obtain a copy of their credit reports to ascertain their credit rating. Under the National Credit Act, individuals are entitled to a free copy of their credit reports annually from Experian and TransUnion.

Evaluating credit reports is vital to identify adverse items and incorrect records. The purpose of evaluation is to rectify inaccurate data. A home loan lender may reject an application on the basis of such records. Small steps such as speeding-up repayments on personal loans and other short-term debts significantly improve the chances of acquiring a home loan in South Africa.

Please contact us if you require any further information or would like to apply for finance:

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011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Credit scores are one of the most important factors that lenders consider when someone applies for a home loan. An individual’s score is considered to be an indicator of his or her creditworthiness. It goes without saying that the higher your credit score, the more likely it will be that you get approved for a home loan.

You can use a minimum score of 640 as a guideline that will determine if you will qualify for a mortgage or not. If it’s lower than 640 then you will have a hard time getting approved for a home loan.

Factors that are used to calculate a person’s score include: the amount of credit you have currently available, your history of making payments on time or not etc.
If your score is low at the moment it will be better to try and improve your score before applying for a mortgage loan.

One of the best ways to improve your credit score is to pay your accounts on time. A history of prompt payments will show lenders that you take your debts seriously.

Avoid taking out too much credit. For the best credit rating try to have only one or two credit cards and one or two major debts (like your mortgage and car) If you have a lot of credit cards, try to make sure that you use no more than 50% of your credit.

For example if your credit card has a limit of R10 000, make sure that you don’t use more than R5 000. If you can get it lower than 50% it will be even better. What’s important to remember is, the lower the percentage of your total credit limit you are using, the better.

It’s not uncommon for errors to show up on credit reports, so be sure to check your credit score on a regular basis.