What is Bond House?
In simple terms, a bond is a loan for which your house functions as collateral. How do mortgage bonds work? When a lending institution lends you, the potential home buyer, money to purchase a property, the actual house is used as a form of security in the event that the repayments are not made.
How To Qualify For A Bond House In South Africa
What do I need to qualify for a home loan in South Africa?
- Are you 18 years or older?
- Do you have a South African ID?
- Is your current income stable?
- Is your credit score healthy?
- Have you checked your affordability with a free bond calculator?
Here are some tips to increase the chance of your home loan being approved, the first time
- Affordability – Your affordability tells us whether or not you’re going to be able to manage your monthly home loan repayments. In order to determine your affordability, one would take your current income (salary, bonuses, overtime, allowances, rental, investments,, etc) and expenses (food, fuel, utility bills, school fees, subscriptions, entertainment, etc) into consideration, then verify this information by reference to your bank statements and other supporting documentation. As much as you may be tempted to stretch yourself in order to afford more on a home loan, it’s important to be prudent and honest when presenting this information. Financial situations can change and being able to comfortably manage your obligations now and over the long term, is always a wiser decision.
- Credit behavior – Having and maintaining a healthy credit record is one of the most important personal finance assets one can have. The score and repayment behavior of all applicants indicates their risk factor to the lender. Inaccurate information or poor history can negatively impact an application for finance. Repairing a bad credit record is essential and should be considered the first step before applying for any loan.
- Have a deposit – The larger the deposit the better. There are significant benefits to saving towards a down payment on the property you’re applying to finance. It’s not uncommon for lenders to offer better rates to clients who put up bigger deposits as the loan will appear less risky in the eyes of the lender. Paying a deposit means that you will also be financing a lower amount. The combination of a better rate and lower bond amount will put you in a better position from the beginning as you save on interest and capital repayments over the lifetime of your loan. Having said this, it is still possible to apply for a home loan with zero deposit.
- Documentation – Whether you’re self-employed or a salaried individual, you need to be prepared with all the documentation that’s required for the loan application. No lender will be able to assist if you aren’t able to provide supporting documentation for the New Purchase Loan, Switch Loan, or Refinance Loan.
Can a foreigner get a bond in South Africa?
The Loan to Value amount is granted on the same basis as per SA Citizens with certain limitations. 2. Foreign Nationals: Applicants must have a valid foreign passport with a valid temporary residence visa such as a work visa, spousal visa, etc.
What documents do you need to apply for a bond in South Africa?
Documents Required for Bond Application
- Identity Document.
- Copy of latest Payslip or Proof of Income.
- 3 Months Banks Statements.
- Offer to Purchase (signed by all parties)
How to buy a bond house in South Africa?
Step 1 – Submit your application: Apply for a bond through a bank or bond originator. Step 2 – Approval in principle: Once your application has been assessed, you will receive approval in principle, subject to valuation. Step 3 – Property valuation: The bank evaluates the property to determine its true worth.