Tips for understanding home loan applications

Looking through property for sale in the East Rand can be a fun process, but many first-time buyers can quickly be intimidated once they start the home loan process.

To assist in making the purchase of your new home a little less stressful, we have compiled some tips that could assist you in understanding how your application will be assessed.

Firstly, you need to understand affordability and your credit score. The latter relates to the way you have handled your accounts over the last year or two. If you have paid bills on time, as well as managed your debt correctly, you will benefit from a positive score; however, poor management affects this.

Affordability checks are done by looking at the amount of funds available to you after monthly deductions. A lot of people can be swept away in the search for the perfect home, and don’t really stick to a budget, hoping that they can push the limit. However, it is better to look at pre-approval before you settle on the home that you want, as it will allow you to be more realistic in your search.

You should also do proper research on properties that you are interested in, as an unsatisfactory property evaluation by the bank can sink the deal. They want to see that the property is in good condition and that the deal is not far off of the market price.

Lastly, you should scour through the declaration of expenses to ensure that everything is listed properly and that duplication is not an issue. For many, duplicated expenses can hurt their affordability or spoil the entire application.

These tips will assist in helping you move through the applications process and look forward to starting your life in your new home.