Do you know how to qualify for a bond?
What do you do if your bank declined your application? First, don’t panic. Banks aren’t the only bond providers in our country. SA Home Loans is South Africa’s only independent, specialist mortgage provider and gives you an alternative that offers you flexible lending solutions at competitive interest rates.
Improving your financial standing increases your chances of a successful bond application. This method can also increase the amount you qualify for, enabling you to purchase an even better property.
Tips for securing a better bond
In South Africa, lenders typically approve applications based on a predetermined set of requirements. These strict criteria sometimes mean that buyers are declined even though they can afford to repay the requested loan. Even if your first application was approved, knowing the tips below can help you apply for a larger bond in future.
- Ask your lender to explain why your application was declined
- There are many reasons why buyers aren’t approved for home loans in South Africa and it’s important that you don’t immediately get disheartened. Knowing the cause of a problem is the first step in finding out how to resolve it. Most people are declined bonds because they have too much debt or an inadequate credit score. If you research the reason behind your disqualification, you can develop a plan and solution that moves you forward.
- Compare bonds from various financial providers
- Did you know that every financial provider can have a unique credit assessment process? As a result, even if one declines your loan application, another may approve it. In addition, different lenders can offer you more or less credit, depending on their criteria. For this reason, homebuyers should explore a variety of channels to find the best bond available to them.
- With SA Home Loans, you can cut out the middle man and speak directly to our consultants about our products and services. Even when you’re researching your options through a bond originator, it’s wise to approach us directly and personally experience our service, features and the quality of our offerings.
- Get rid of your bad debts
- Owing too many creditors money is one of the most common reasons behind home loans in South Africa being declined. This is because lenders believe that applicants with large amounts of outstanding debt have a greater chance of not keeping up with every monthly payment.
- SA Home Loans evaluates the financial status of each applicant as an individual, approving or declining bonds based on merit. In doing so, our consultants take into account every aspect of your debt, from your credit history to your overall financial management strategy. Well-managed finances and healthy credit scores always increase your chances of a successful home loan application.
- Save up a large deposit
- Another secret to qualify for a better bond is to come prepared with a significant deposit. Most credit providers require homebuyers to have access to at least 10% of their intended property’s value in cash. But did you know that having more than this available can benefit you in additional ways?
- For one, the bigger your initial deposit, the smaller your capital debt – which in turn reduces your interest and saves you in the long term. Secondly, credit providers view homeowners with a higher deposit as a lower risk and may be willing to loan you a larger bond or better interest rate.
- A deposit certainly increases your chance of affording a better home, and enables you to save thousands of rand over the lifetime of your loan.
Stop focusing on interest rates – opt for exceptional service instead
SA Home Loans is well known for offering clients competitive interest rates. However, our exceptional service is the real reason behind our loyal customer base. In fact, every one of our bond applicants is:
- Treated as an individual
- Assessed on his or her own financial merits
No one is held to set standards, as is the case with larger credit providers, such as banks.
Furthermore, our property finance consultants are experienced in motivating a diverse range of bond applications. From first-time buyers to clients purchasing their third home, our team is specialised, and has the resources and information you need to secure the best loan. We can also help you switch your existing bond to one of ours.
How long does it take to get bond approval in South Africa?
“Ideally, it should take a minimum of one week to get complete approval however, due to application backlogs, delays or customers not meeting certain requirements, the process can be delayed for at least two to four weeks at most,” adds Mabulu.
How does a joint bond work in South Africa?
By signing a joint bond agreement, you and your investment partner(s) are jointly liable for the repayments, taxes, and any other legal and administrative fees associated with the purchase or sale of the property. Equally, the credit record of each partner will be affected if there is a default on any payment.
How do you qualify for a bond in South Africa?
- Check your affordability. Before you even apply for a loan, check whether the property is affordable, suggests Geldenhuys.
- Get prequalified.
- Check your credit record.
- Submit the correct information.
- Get the best interest rate.
- Use a home loan comparison service.