How to apply for a home loan

You’ve found your dream house, signed the offer to purchase and now all you need is to raise the cash. This can be easy if you know exactly what you will need in order to qualify for a home loan. Here we discuss the requirements for applying for a home loan in South Africa.

Assessing your finances

There are two ways you can apply for home loans in South Africa: You could either visit a registered Financial Institution such as a Bank or via a Bond Originator. Whichever option you choose, you’ll need the following to qualify:

1. A Permanent job
2. An acceptable and clear credit record (Find out how to Get a Good Credit Record)
3. Sufficient cash surplus after all your monthly expenses have been paid; to cover the home loan instalment (use an online home loan calculator to guide you on affordability)
4.Depending on your individual financial position, a deposit may also be required in order to secure the desired amount you wish to loan.

The paperwork you'll need

You will need to provide the following documents to accompany your home loan application:

1. A Valid South African ID
2. Proof of Income
3. Schedule of monthly household income and expenditure
4. Proof of Address (a bill in your name which quotes your address)
5. Offer to purchase
6. Bank statements (usually 3 – 6 months and should be stamped)

The final turn

A credit scoring system is used to assess home loan applications, and to get an approval means there will need to be a property valuation. Once your home loan is approved, you’ll be issued a quote and if you’re happy, you can accept and the transfer and bond registration process can begin.