Documents to be submitted for a home loan

Buying a property and applying for a home loan can be an administrative nightmare. The requirements for the supporting documents will vary depending on the type of home loan as well as the bank.

“It is important to note that each bank will have slightly different requirements, which is why it can be useful to work through a bond originator such as BetterBond that can apply at all the banks on your behalf and come back to you with the best offer,” recommended Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.

Also read: Three home improvement trends to boost your property value

Goslett explained that in general, employed individuals will need the following documentation for the application:

• Proof of income: This will be your latest payslip, however, if you earn commission or overtime, you generally will need to provide the last three months’ payslips
• Bank statements: Most banks require your last three months’ personal bank statements
• Identification document: If you are using a smart card, include a copy of the front and back
• Marriage certificate: If you are married, you will need to provide a copy of your marriage certificate, as well as a copy of your antenuptial contract agreement if you have one
• Copy of purchase agreement or signed offer to purchase
• Proof of residence

“If you are applying with a partner, relative, friend, or spouse, they will need to provide the same documentation as well,” he added.

Also read: Homeowners’ guide to surviving interest rate hikes

Goslett also mentioned that the bond application process looks a little different for the self-employed individual. In addition to the above, those who are self-employed will usually need to submit a three-year set of signed financials; an auditor’s letter stating the income and the expenses paid for by the business; a personal statement of assets and liabilities; three months’ personal bank statements; six months’ business bank statements; and the latest IT34 from SARS.

Those who are buying a property as a company or a trust will also need additional documents when applying for a loan. This includes the Trust Deed as well as a Letter of Authority, which is a letter from the Master of the High Court with information on who the trustees are and giving the trustees the authority to act within the interests of the trust.

Those who are building a home will need to apply for a building loan. In general, Goslett explained, when applying for this sort of loan, you will need to submit the building plans and detailed quotes, the building contract signed by you and your builder, the builder’s NHBRC certificate, and a schedule of finishes that clearly indicates the materials used and the costs for erecting the building.