Before applying for a home loan you need to make sure you are properly prepared and have your expenses under control.

To improve your chances of being approved for a home loan, you should try not to take on any other big debts in the six months before you apply.

This is the advice of Hano Jacobs, CEO of the Realty 1 International Property Group. “Banks don’t like to see too many recent requests for credit clearance on your record, so this is not the time to buy a new car or furniture on a hire purchase agreement.”

“In fact, you might even think twice at this stage about taking out a new cell phone contract or applying for a new store card,” he says.

Home buyers should also do their best not to change jobs while in the process of applying for a home loan. “Lenders look for employment stability, so if your reason for moving house is to take up a new position, you will need confirmation of this from your new employer to accompany your home loan application, in addition to your salary records from your current job,” says Jacobs.

He warns that home buyers should not try to conceal anything in their financial past from the lender. “If you have borrowed the cash to pay the deposit and will have to repay it, say so. If you have had credit problems in the past, admit to these too.

“Today’s sophisticated credit checking systems will inevitably reveal the whole story, and once lenders find you have been less than truthful about one thing, they will naturally start to question the rest of your home loan application and once that happens, the chances are very good that it will be declined.”

Two further pieces of advice for home buyers, he says, are not to go on a spending spree for a new home if their home loan application is approved, and not to proceed with an application if a change in their circumstances means they will not be able to afford the repayments.

Some additional expense on a new home is to be expected, says Jacobs, but buyers should resist the temptation to splash out and deplete their cash resources at least until they have taken transfer and established the actual running costs of their new home.

“And if something should happen that makes a big change to your financial picture, such as a disabling accident or a retrenchment, for example, it is not a good idea to proceed with an application in the hope of securing the loan before the bank finds out what has happened,” says Jacobs.

He advises that if there is a good chance you will not be able to repay the debt, you should rather withdraw the application – and keep your credit record intact.

Mortgage Plus offers a wide range of advice on different bond options and further advice on the above. Please call us for further information on:

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Banks’ methods of handling bond applications questioned

Bank-bashing (by no means always justified ) has become a popular pastime in SA – but there is one serious cause for concern and that is the banks’ methods of handling bond applications, says Clarke.

“Almost daily,” he said, “we pick up complaints about the way mortgage bond applications are handled by the banks.”

The big four SA banks, he said, are fortunate to have many exceptionally loyal clients – and one result of this is that often these clients will reject any help from bond originators and will instead go directly to their own bank.

Here, said Clarke, after an initial meeting with a consultant, who is not always an expert in bond finance, they can often find themselves having to track the progress of their bond via a call centre.

This, says Clarke, can be a totally impersonal experience.

“The client finds himself dealing with a disembodied voice on the end of a line – and this bank representative voice is likely to have no concern or compassion for the client’s position.”

In the worst cases, said Clarke, the bond gets seriously held up or even lost – sometimes forcing the applicant to start all over again.

“It goes without saying,” commented Clarke, “that this can result in the buyer losing out on his dream home and the seller having to start the sale process all over again.”

The (sometimes) unsatisfactory bank performances, said Clarke, date from the time when bond origination caught on and the banks found that they could leave much of the paperwork to the originators. This, in turn, led to their cutting back on staff numbers.

Now, said Clarke, they are on a different tack and are trying once again to channel more applications directly to themselves.

“By and large,” he said, “this does not work to the benefit of the applicant. If, however, he approached a bond originator  to apply to several banks to get the deal best suited to the client.”

“The importance of this cannot be over-emphasised. “It is perhaps the main reason why Mortgage Plus Finance is achieving a hit rate 10 to 15% above the SA average and building such a good reputation for itself.”

“All in all, therefore, I am inclined to feel that banks must foster rather than try to eliminate originators.”

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Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online

Call us on 011.327.4489

Email: morne@mortgagepluscc.co.za

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