There is no better time to be shopping around for your real estate than right now, with prices still at relatively low levels and strict lending criteria making it difficult for many prospective buyers to get their foot in the door. Whether you are a first-time buyer or upgrading or expanding your existing real estate portfolio, getting a loan will, for most people, be crucial. According to the latest statistics by mortgage originator ooba, 52,8% of loan applications are currently being turned down by banks. Here are some tips to improve your chances: Work on your credit rating Banks have a much lower appetite for risk than during the property heyday of 2005 to 2008, and the strict National Credit Act isn’t exactly making things easier. All lenders will check your credit rating before they will lend you a cent. To improve yours, make sure your bills are paid on time, and clear as much debt as possible. If you haven’t had credit before, open an account somewhere to show that you can manage debt. Other factors that are taken into account include how long you have been at your current address, job and bank. Visit www.transunion.co.za to check your credit rating for free, with detailed reports available at a cost of R20. Make sure all your details, e.g. previous addresses, are correct before you apply for a loan. Save for a bigger deposit The bigger your deposit, the better your chances of getting a loan. Currently the average deposit for buying real estate is around 20,2%, according to ooba. An improved credit rating and bigger deposit will also improve the interest rate on the loan, saving you thousands of rands over the term of the loan. Shop around Don’t despair if one bank turns you down or only offers expensive interest rates. In March, 22,1% of loans declined by one bank were approved by another, so investigate all possible options.
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