Whether you want to purchase a home to rent out or one for your family, it’s typically an expensive investment. That a majority can’t afford to pay in cash and in such instances, most prospective homeowners apply for a bond.
- Most apply either through a bank
- Bond originator
- Or specialist home loan provider
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.
Money is one of the most common reasons behind home loans in South Africa being declined. As affordability is a requirement. 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.
One such lender who is not too keen with you owing to too many creditors is the bank who their home loan approval maybe seen as stricter in regards to that. Banks apply strict affordability criteria in terms of the National Credit Act, with the result that most buyers now require a bigger percentage of the purchase price as a deposit.
Whereas if you go through a specialist mortgage provide such as SA Home Loans they evaluate the financial status of each applicant as an individual, approving or declining bonds based on merit. In doing so, their consultants take into account every aspect of their client’s debt, from their credit history to their overall financial management strategy.
Loan brokers are more willing than banks to negotiate with you. At the end of the day, brokers understand that their livelihood depends on your business, so you can negotiate with this in mind.
However brick and mortar banking institutions can also provide a number of benefits for mortgage financing, particularly if you’re an existing customer with the bank. For example, at some local credit unions, you might find bargain basement mortgage rates or fee-free mortgage programmes simply because you’re already a customer.