How do I apply for a home loan?
When embarking on the exciting journey toward buying a property it's important to get the essential requirements out of the way. Having your finances in order puts you at ease to continue planning the more fun aspects of moving into a new home and adds to the final sense of security when you turn that key in the lock.
What exactly is a home loan and how does it work?
Everyone deserves to live in the home of their dreams. Licensed banks make that possible by providing you with the funds to purchase the property under a contract with terms and agreements stating the condition of the loan. All home loan applications are overseen by the Banking Code of Conduct and Banking Practice as defined by The Banking Association of South Africa. This ensures that everything is done above board and is properly regulated.
Criteria for your home loan application:
- To be 18 years or older
- A good credit record
- A six-month permanent employment record or two years if self-employed
- Copies of your and your partner's South African ID documents
- Three months bank statements
There are many online prequalification tools that simplify the process of your evaluation. You can also increase your chances by applying to multiple banks. You need to have a clear understanding of what certain banks are looking for and match your loan application criteria to cater to them. With all your ducks in a row, you can sit back and start researching everything you need to know about buying your first home.
How do home loan interest rates work?
There is a variable rate and a fixed rate. The variable rate is dependent on the prime lending rate by the South African Reserve Bank. When the prime lending rate changes, home loan charges are adjusted. This can result in your monthly instalment either increasing or decreasing. It's always advisable to have some cash for a rainy day saved up for just this purpose.
A fixed interest rate can be negotiated with the bank. The benefits to this are that your home loan will not change and you will be able to conveniently pay the same instalment every month. This allows you to budget responsibly and stay on top of your monthly financial obligations.
Speaking of finances, there are many things to consider when factoring in your monthly budget alongside the additions you will need to pay on your home loan. These include Homeowners' Comprehensive Insurance and Mortgage Protection Cover. Optional value-add products and insurances cover disability insurance, household content insurance and loss of income insurance.
The main steps
- Work with a trusted home loan financial services supplier like Ooba Home Loans
- Get a pre-approved certificate indicating your financial status
- Find a home within the amount you've been approved for and enjoy the house hunting!
- Select from the best bank bond offers and quotes as provided by Ooba Home Loans.
A home loan is a great way to enter the property market and add to your good credit score. Not many individuals can afford to save up enough to purchase property without one. At REALGLEN Properties, we are committed to honouring our word in providing the best support and real estate advice on the market. Contact us today to discuss getting a home loan and begin looking for your happy place.