Buying a home is a big decision.

Here are five tips worth considering before you take the plunge…

1. Consider Housing Costs

It may be tempting to put in an offer on a home but remember, along with the mortgage payments, you will also need to budget for property taxes and utilities. There will also be expenses connected with maintaining the property, even if you are not planning on doing any renovations right away. Consider these costs carefully before you make an offer.

2. Making a Long-term Commitment to a Home

While right now may be a good time to consider buying a home, keep in mind that prices may drop further in the short term. If you know that you will be staying put for several years (at least five), then now is a good time to think about buying a home. On the other hand, if you see yourself moving in the next couple of years, you may want to hold off on committing to home ownership for the time being.

3. Think of Your Needs First

If you have checked your budget numbers and you decide that you can afford a home and you will be staying in one place for the foreseeable future, you can start figuring out what features are more important to you in a home. Some home buyers want to live in a certain area or close to shopping and recreational facilities. People with children will want to find out about day-care facilities, schools, parks, doctors’ offices, etc., in relation to the house they are considering. These kinds of the things are ‘must-haves’ when you are looking for a home.

4. Your ‘Wants’ Are Not Needs

Just about everyone has a list of things they would like to have in their ‘dream’ home. As long as you are willing and have the means to pay for luxuries, it’s not a problem. You may want to keep in mind that it’s perfectly all right to get into the housing market with a starter home, build up some equity, and then move up to a bigger house that you really want. You may ‘want’ the home theatre, whirlpool tub, and granite counter tops, but do you really ‘need’ them?

5. Phone Mortgage Plus for the Best Mortgage

There are many options available to home buyers who are looking for a mortgage. Not only are there many lenders offering financing, but there are different kinds of mortgages offered by the same lender. Consider the interest rate, payment options and any required fees before you sign any mortgage documents.

Be smart. Consider your budget, how secure your job is, and separate the things you must have from the factors on your wish list to make the right choice for you.

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

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

How To Qualify For A Mortgage Loan

Since the National Credit Act was implemented and the start of the global economic crisis it has become more difficult to qualify for a mortgage loan from your bank, to qualify for a mortgage loan your bank will require that you meet the following criteria:

• Have a stable steady income , you will need to provide proof of this in the form of a payslip or audited financial statements
• Qualify for the loan in terms of the banks affordability criteria and be able to afford the monthly mortgage payments
• Have a clean credit record , if you have any default judgments or listings the bank will turn down your mortgage application
• The bank may apply additional conditions at its discretion.

The different South African banks may apply different conditions when considering your mortgage application , but these are the core conditions that you should be able comply with in order to qualify for a mortgage loan.

Here are a few pointers and advice on ensuring that you make the best case when applying for a mortgage loan;

Stable and Steady Income

If you are employed and receive a payslip the banks will feel more comfortable in providing you with a mortgage loan. People that are self employed will need to provide the bank with a great deal more information to qualify for that mortgage loan. The bank will require that you provide them with your latest set of audited financial statements as well as 6 months bank statements – the bank wants to satisfy itself that you are able to generate an income to cover your mortgage payments. If your business is still new or not generating the desired level of income it would be prudent to hold off on your mortgage application until you and the business have built up more of a track record.

Banks Affordability Criteria

You have a steady income , but based on the banks affordability criteria you don’t qualify. You could always consider applying at another bank as the various South African Banks have varying affordability criteria , however this is only likely to work in marginal cases as essentially the banks consider the same facts.

You need to identify what the problem areas were in your application and to address these issues. Often applicants are declined because their debt levels are just too high and a significant portion of their income is used to service debt. The only advice here is to reduce your debt levels to acceptable levels before reapplying , you can do this by cutting your expenses and paying off more debt. Always pay off the most expensive debt first and work through your debts systematically. As you pay off more debt increase you repayments on other debt items until your debt levels become more manageable.

Another problem area causing your mortgage application to be declined is that your income is just too low to service the mortgage. Your options are to shop around for a more affordable property that you are able to finance. Another sensible approach is to save towards a bigger deposit making the property more affordable. You can also try increasing your income – tough in these economic times.

Clean Credit Record

This is where most people fall short with their mortgage applications. Before approaching your bank for a mortgage loan always check out your credit profile before applying. You can do this at the major Credit Bureaus , ITC Transunion and Experian – they may charge you for the credit report , but is well worth the expense.

If your credit record has a few blemishes you may need to clean it up before applying for a mortgage loan. Where a creditor lists you as a slow payer, you should get your payments up to date and conduct your account in a more responsible manner. Afterword’s approach the creditor and ask them to remove the slow payer status.

Where a creditor has obtained a default judgment against you the situation become more tricky. You will have to pay the debt in full and ask the creditor for a rescission of the default judgment. Approach the creditor before paying the outstanding amount , make them an offer to pay off the entire amount and costs in exchange for them having the judgment rescinded.

In cases where you have paid the entire debt , but you are still reflected on the credit bureau you should obtain a letter from the creditor stating that the debt has been paid in full. It is always best however to try and get the listings removed as it just makes the mortgage approval process easier.

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CONTACT US

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

www.mortgagepluscc.co.za