A guide to co-applying for a bond with family members

If you can’t afford to put in a home loan application as an individual, to increase your chances of qualifying for a bond you should consider co-applying with a partner or family members.  According to Mpho Ramatong, FNB Home Finance Division Channel Head for Housing Schemes, “finance institutions do offer consumers an opportunity to submit a home loan application with two or more parties.

While financing institutions adhere to normal credit and affordability assessment criteria when assessing joint bond applications, they assess the profiles of all the co-applicants as well as their joint income.

These are the tips Ramatong shared for those considering to co-apply:

1. Clear credit record – while you may be applying with a partner, it is still important for all partners involved to maintain a good credit record to be considered for a loan and to get a good interest rate.
2. Common objectives – to avoid misunderstandings, all partners co-applying for a home loan must share common objectives.
3. Financial discipline – a setback from one person can potentially put all other partners at risk, while denting their credit records. Furthermore, Ramatong advised that “the monthly home loan installment has to be debited from one account. Therefore, an agreement will have to be reached on whose account the funds should come from. This particular account should always have funds available on the installment date”.
4. Unforeseen events – it’s important for everyone entering into the agreement to consider having life and disability cover to ensure the home is safe should any sudden event occur.

While this is a standard requirement for some financial institutions, it may not be a condition for other banks, which makes it the applicants’ responsibility to see to it that cover is in place.