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Get pre-qualified for a home loan

31 Oct 2013

The South African property market is healthier than it has been in years resulting in a great deal of market activity and many buyers looking to obtain home loans.

The South African property market is healthier than it has been in years resulting in a great deal of market activity and many buyers looking to obtain home loans.

However, applying for a bond can be a tedious process involving a lot of red tape and the disappointment of being declined can leave you feeling despondent and frustrated.

Tony Ketcher, Seeff MD in Randburg, says because of this they strongly advise buyers to undertake a pre-application assessment from a bond originator like ooba to assess their home loan qualifying ability before they start looking for property.

He says buying a home can be an emotional process and this can sometimes influence property buyers, causing them to overlook important aspects related to the transaction.

“Not knowing what your buying potential is right from the start can easily lead to Illusions of Grandeur and wishful thinking about your financial capability, and this results in inevitable disappointment.”

Ketcher says a pre-qualification assessment is generally conducted prior to the estate agent taking you to view properties. “An expert will interview you and conduct a full income and expenditure assessment whereafter a credit bureau enquiry will be conducted to ascertain your credit risk profile”.

A further benefit of this assessment is that any credit related impairments will be uncovered early on in the process, and if necessary, professionals will assist with the appropriate process of rehabilitation.

“If the assessment shows that you have an insufficient net surplus income, a debt consolidation investigation will be undertaken and if the report shows that you have a poor credit record, professionals will assist you in rehabilitating your record before buying.

"If you have a positive net surplus income as well as a clear credit check then an ooba qualified certificate will be issued at a maximum of 30 percent to your gross income.”

It all boils down to uncovering any affordability shortfalls early on in the game and ensuring that the home buyer targets his home search to suitably priced properties, he says. "If you have your heart set on something, at least you’ll know whether it’s in reach, financially.” Ketcher says it is important to always meet your monthly debt repayments on time and to pay the minimum monthly instalment on your credit card in order to keep a healthy credit score.

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