We will try to answer your most burning questions about home loans and the process of applying for property finance on this page which will be updated regularly.
Tap on each question to show the related answer.
Criteria and Requirements
The lenders in South Africa are quite strict when it comes to their lending criteria, but don’t let that discourage you from applying.
As long as you can afford the property and the monthly instalments, have a good credit record and manage your bank account in an orderly manner you stand a good chance of approval.
The other home loan requirements are that the instalment may not exceed 30% of your gross monthly income, and the loan must comply with the National Credit Act. This also means that you may not apply for a new or further loan whilst under debt review or administration.
Ask your bond originator to pre-qualify you so that you know what you can realistically apply for. This will help avoid disappointment in the end. To get started, click here to apply
Unfortunately according to the National Credit Act it would be against the law to provide you with further credit whilst under debt review. You will have to settle all your existing debt before you will be able to apply for further credit.
It would also be advisable to have your ITC records cleared after debt review so that the banks will not decline your application in future.
Usually the banks use your monthly/weekly gross salary to determine your maximum loan amount. In some cases you might receive rental income from another property or a flat. Each bank has their own criteria and method to calculate the rental income when evaluating your application, so there is no definitive answer in this case, but I will try to explain the trend below.
The banks will rarely use the full rental income since there is always a risk that the property being rented out might be vacant for a period of time. To reduce this risk, only a certain percentage of this rental income is used in the calculation and this percentage varies between the banks.
Should you be purchasing a new property for investment purposes and to obtain rental income from these (buy-to-let properties), this would be referred to as Future rental income, which is usually not included at all, or only a very small percentage of the possible rental income might be used. In this case a percentage of the actual purchase price might be used since there is no record or proof of the rental income on your bank statements.
To conclude, if you already earn rental income, be sure to include this when applying for a home loan. Even though the full amount will not be used, at least this still improves your chances of obtaining a home loan.
If you are buying property to lease, but do not yet receive the rental income, this Future rental income will not count towards your total income and will not be used in the review of your application.
Disclaimer: The information provided above is not set in stone, and the lenders change their lending criteria and requirements often. Be sure to discuss this with your bond consultant when you apply for your home loan.
The website on which you are now (homeloans-sa.co.za) is not affiliated with SA Homeloans (Pty) Ltd. We are a bond originator and we work with the four major banks in South Africa.
If you want to reach SA Homeloans (Pty) Ltd, you can visit their website at sahomeloans.com for their contact details.
Yes, you certainly can. But you will have to wait for about 1 year after rehabilitation before the banks will be willing to assist you.
The website on which you are now (homeloans-sa.co.za) is not affiliated with SA Homeloans (Pty) Ltd. We are a bond originator and we work with the four major banks in South Africa.
If you want to reach SA Homeloans (Pty) Ltd, you can visit their website at sahomeloans.com for their contact details.
Yes, we will be able to assist you with buying property within the borders of South Africa if you are not a South African citizen but you meet all the other basic requirements.
Unfortunately we will not be able to assist you with a home loan at this stage as, according to the National Credit Act, it is against the law to provide you with further credit at this stage. It is advisable to have your ITC records cleared before applying so that the banks will not decline your application in future.
Yes, the 4 major banks approve about 50% to 70% of home loans for South African living and working abroad.
Documents and Processes
When you apply for a home loan, the banks/lenders will require some documents to assess your application.
It is important that these documents are clear and legible to avoid any unnecessary delays with your application.
Below is a list of documents required for employed applicants.
- Copy of your ID (if joint application, also a copy of your spouse’s ID)
- Employer details (Name, phone number, address and date you started working there)
- Copy of latest salary slip(s)
- Copy of Offer to Purchase
- 3 Months Bank Statements (original or stamped by the bank, not internet bank statements)
- Proof of Address (utility bill, etc.)
For a Further Bond you will also need to include your latest bond statement.
An Offer to Purchase is one of the most important documents when purchasing property. This document contains all the information about the parties involved, the property being sold, details regarding the sale, any specific conditions and also the price offered and accepted.
If you purchase a property through an estate agent, the agent will usually provide you with a copy of their own Offer to Purchase. They will then enter the information required and you’re all set.
However, if you plan to purchase a property privately you will need to get your own offer to purchase document. It would be highly advisable to get a copy from a reputable source such as an attorney or a bond originator. There are also plenty of samples of these contracts available on the internet, but make sure that the offer to purchase includes all the necessary information. Errors and omissions on such a contract can cost you thousands, and the sale could be terminated costing you time, money and the property.
In another post titled 9 Essential Elements Of Legitimate “Offer To Purchase” Contracts I explain in detail what should be included in such a document to make sure each party is sufficiently covered and that no important details are left out.
Should you need a blank offer to purchase, simply apply for your home loan on this site and our consultants will gladly send you a contract to use.
You can fax your documentation to us at the following fax numbers:
- Fax: (011) 219-7325 or
- (086) 504 8066
Alternatively, you can also email scanned documents to [email protected]
The outcome of a loan normally takes between one to three weeks.
Calculations
A home loan repayment might include various other costs such as homeowners insurance and admin fees. The repayment is also dependent on the interest rate you receive from the bank.
To get an idea of the repayment on the amount you would like to apply for, use this online Bond Repayment Calculator.
Since you are already working on your budget, it would also be a good idea to look at this article about the Costs Involved in a Home Loan.
Visit www.bondcalculators.co.za and fill in your specific details for an estimate of the amount you qualify for and your monthly repayments.
Unfortunately not, the banks will not take your increased salary into consideration. We will advise you to wait for your increase before applying for your home loan.
Buying Property
For a list of repo properties, have a look at http://www.myroof.co.za. They list properties form ABSA, FNB and Standard Bank.
Nedbank properties can be found here: http://www.nedbank.co.za/website/content/nop/
Once you have found a property you are interested in, let us know so we can assist with your finance.
Hope you find something suitable.
HOC is for Homeowners Insurance (also known as building insurance) since it covers the actual property, but not the household content.
HOC insurance is compulsory whilst repaying your bond, but you may shop around for better prices. I’ve recently found a company that claims to save you at least 20% on your HOC insurance premiums.
Account Enquiries
We are a mortgage originator, not a bank or financial institution. That means that we do not have access to your personal profile and account details.
To arrange for email statements and/or account enquiries, please contact your financial institution directly.
For your reference, here are the websites of the major financial insitutions to find their contact details:
Additional Offers & Services
Yes, we do offer life insurance (more than just bond insurance). The company we use is Frank.net, their premiums are very competitive.
Unfortunately, we are not allowed to deal with switches, but we will be able to outsource you to a consultant of the bank of your choice. We have negotiated with some of the banks for a discount on attorney fees. Please contact us for more details.
We will advise you to stay with your current bank because you will loose all the interest you have paid up till date when moving from your current bank.
Certainly we can assist you – I have attached a link to a blank copy of an Offer to Purchase for your perusal. Feel free to contact us to get the process started in the meantime.
Yes, we have a dedicated commercial and agricultural department.