When applying for a home loan, be it a new home loan or a second bond you will need to collect the documentation required by the banks to efficiently evaluate the home you wish to purchase, the improvements or alterations you wish to do as well as your personal financial documentation.
The documentation you present to the banks must be 100% accurate and in accordance with what your originator requests. Home loans have been turned down because of incomplete or unclear documentation. What they need to see is clear evidence of the source of your income, details of any additional income sources and the stability of your financial history.
Basic home loan qualifying criteria (personal)
- A monthly income of at least R 15 000 (single or joint) is required.
- Only residential properties may be financed.
- All other normal credit criteria apply.
When making your application you will need to authorize the bank to obtain your personal credit profile from one of the credit vetting agencies like Experian. This is used only to evaluate their risk and will play a role in determining the interest rate the bank offers as well as the percentage deposit if any they require and whether or not a surety is required.
Documents required for an application
- Fully completed and signed application forms.
- Copy of your Identity Document/Passport (the person in whose name the bond will be registered as well as any sureties)
- Proof of income in the form of payslips (at least 3 months)
- Copy of the Offer to Purchase showing the property details.
- 3 recent and months of bank statements showing your salary payment.
With these documents readily available the bond originator can begin completing your home loan application forms, check credit ratings and advise you of any additional documentation required or action to be taken on your credit profile.
The advice of a bond originator is vital to a successful bond application and an experienced bond originator will not submit your application until such time as he is confident that the banks will approve your home loan and he is in a strong position to negotiate a favourable interest rate. In some cases as much as 2.5% below prime interest can be achieved by a good originator dealing with a strong application.