Homeloans SAfaq on Homeloans SA https://homeloans-sa.co.za Find the best Home Loan deal in South Africa Fri, 14 Jan 2011 12:30:48 +0000 en hourly 1 Do Lenders Consider Rental Income As An Additional Income Source? https://homeloans-sa.co.za/faqs/do-lenders-consider-rental-income-as-an-additional-income-source.htm https://homeloans-sa.co.za/faqs/do-lenders-consider-rental-income-as-an-additional-income-source.htm#comments Fri, 14 Jan 2011 12:30:48 +0000 Chris du Toit https://homeloans-sa.co.za/?p=562 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.

]]> https://homeloans-sa.co.za/faqs/do-lenders-consider-rental-income-as-an-additional-income-source.htm/feed 0 Will I Qualify For A Home Loan? https://homeloans-sa.co.za/faqs/will-i-qualify.htm https://homeloans-sa.co.za/faqs/will-i-qualify.htm#comments Thu, 13 Jan 2011 14:47:58 +0000 Chris du Toit https://homeloans-sa.co.za/?p=543 The lenders in South Africa are quite strict when it comes to their lending criteria, but don't let that deter you from applying.

As long as you can afford the property and the monthly installments, have a good credit record and manage your bank account in an orderly manner you stand a good chance of approval.

The other requirements are that the installment may not exceed 30% of your monthly income and the loan will 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.

]]> https://homeloans-sa.co.za/faqs/will-i-qualify.htm/feed 0 What Documents Are Required For A Home Loan? https://homeloans-sa.co.za/faqs/documents-required.htm https://homeloans-sa.co.za/faqs/documents-required.htm#comments Thu, 13 Jan 2011 14:23:21 +0000 Chris du Toit https://homeloans-sa.co.za/?p=540 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.

]]> https://homeloans-sa.co.za/faqs/documents-required.htm/feed 0 What is an Offer To Purchase? https://homeloans-sa.co.za/faqs/what-is-an-offer-to-purchase.htm https://homeloans-sa.co.za/faqs/what-is-an-offer-to-purchase.htm#comments Thu, 13 Jan 2011 13:14:30 +0000 Chris du Toit https://homeloans-sa.co.za/?p=535 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.

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