The home buying process and especially your home loan, is a long-term commitment and not something you do every day. You need to be correctly informed before making any decisions. It is always a good thing if you can put some money towards a deposit for your new home, but Standard Bank have some options available for those of you who don’t have the deposit available. The deposit is usually 20% of the cost of your home.Standard Bank has developed various different home loan options to suit your financial needs and desires. With Standard Bank you will find the process of a home loan to be simplified, making it easier to understand and more accessible. Documents you will need to help you start the home loan process:
- You latest pay slip as proof of your income
- Your SA identity book as proof of your identity
- Your marriage certificate or divorce decree
What Home Loan amount will you qualify for?
You are generally allowed to use about 30% of your income for home loan installments. These installments exclude your home insurance amount. Deduct all your monthly expenses from your monthly earnings. Your monthly earnings should include any housing subsidies. The amount that you are left with, is the amount you can afford to put towards a home loan repayment.
Applying for a Home Loan with Standard Bank
After the offer of purchase has been signed, your home loan application can be finalized by following these 5 basic steps:
- Financial Assessment Your financial state and credit record is assessed to make sure that you have a good credit record and can afford your home loan repayments.
- Property Assessment A property assessor inspects the house you want to buy. His job is to make sure that the price you are paying does not exceed the real value of the property.
- Letter of Grant This is a confirmation letter from Standard Bank that we will give you the loan and it states the amount we are willing to offer for you.
- Legal Documents The legal documents instruct the attorneys we appoint to register the home loan and transfer the property into your name.
- Your Home Loan The seller of the property gets paid for his property and your home loan account is created with Standard Bank. Some of the Basic Options Available from Standard Bank Home Loans
1. DreamStart – Standard Bank Lower Income Home Loans
DreamStart is aimed at entry-level income earners by making home finance more accessible to them. The entry-level earners are those who earn between R1500 and R6000 a month, joined or single income. Your home loan will also includes a life assurance policy that will ensure that the outstanding amount of your home loan account is settled, should you die. You can also apply for the AccessBond facility with your DreamStart Home Loan option. The criteria that applies to the DreamStart option include:
- A single or joint income that of between R1500 and R6000.00 a month
- You are building a new home or
- You want to move to a bigger or better home
- A debit order or salary deduction is compulsory
2. JumpStart – Standard Bank Cost Inclusive Loans
JumpStart helps the buyers who can not afford the deposits and other up front costs like transfer fees, bond registration costs etc. A maximum loan of 108% is allowed to help you with these payments, especially when you are a first time homebuyer. The loan amount is calculated on 108% of the total value of the property. The criteria that applies to the JumpStart option include:
- A single or joint income that exceeds R6000.00 a month
- You must be permanently employed
- You must be 18 years or older
- A debit order or salary deduction is compulsory
The JumpStart home loan option is not available for the following loan types:
- Commercial loans
- Business loans
- Vacant land
- People with a joint or single income of less than R6000.00 a month
- Home loans in the name of a trust, company, close corporation or home loan switches from other banks.
3. Ordinary Home Loans – Standard Bank Home Loans
Standard Bank’s ordinary home loan gives the homebuyer a loan to the value of the property (100% LTV). The homebuyer must make provision for the upfront costs like the transfer costs and bond registration. The criteria that applies to the Ordinary Home Loan option include:
- Homebuyers who do not want to include bond costs in their loan
- A single or joint income that exceeds R6000.00 a month
- You must be permanently employed
- You must be 18 years or older
4. Standard Bank SecuraRate
SecuraRate is a whole range of different interest rate options that you can choose from according to your specific needs. You can choose between a fixed rate and a capped rate option. The fixed rate freezes your interest rate for a certain extent of time, being 12, 14 or 18 months. The capped rate caps your interest rate at a maximum rate for a certain extent of time. With Standard Bank an interest rate is guaranteed over an agreed period of time that you selected. Economic factors like inflation or currency depreciation would not influence your home loan interest rate over the period you selected.
5. Standard Bank Variable Rate
The Standard Bank Variable Rate option is a conventional home loan. The base rate of Standard Bank’s home loan has been 14.50% since December 2007. The rise and fall of interest rates influence your home loan interest rate.
6. Standard Bank Pre-Approval
When you are starting to search for your dream home, you should go to Standard Bank to get a home loan pledge. This is a guarantee for the maximum amount that Standard Bank would offer to lend you for a home loan. This pledge is a free service from Standard bank and is valid for six months from the date of issue.
7. AccessBond Facilities
With Standard Bank Home Loans you can apply for an AccessBond link facility that will allow you to withdraw additional funds that you have deposited into your home loan account. The money can only be withdrawn after the loan to value is less than 100%.
8. Three Month Payment Holiday
This option of Standard Bank allows you to only start paying your home loan installments three months after registration, giving you a gap to use your money to get your home the way you want it. With this option the maximum installment to income is 27%. Standard Bank has a number of product options available – you must choose the option that suits your needs and lifestyle the best.