On signing an offer to purchase a property, you should apply for your home loan – one of the biggest financial commitments you will ever make.
Some agents will put you in touch with a mortgage originator, such as ooba. Mortgage originators are not finance providers; they broker home loans from the banks and will offer you options. But ultimately, you are in control. You have every right to cut out the middleman and shop around to find the best deal and lowest interest rate.
When applying for a home loan, you and your spouse will need:
your ID books;
your latest payslips;
bank statements for the previous three months;
proof of any housing subsidies, commission or regular paid overtime;
your marriage certificate or ante-nuptial contract, if applicable;
a summary of your monthly expenses; and
a copy of the sale agreement.
If you are self-employed, you will need to present additional documentation, such as a letter of drawings and financial statements from an accountant, as well as statements for both personal and business bank accounts and proof of the company's registration.
When applying to transfer your bond you will need:
Proof of income: your three latest salary advice slips.
Three months of personal bank statements.
Three months of statements for your esisting bond.
A copy of your ID document.
A copy of your marriage certificate or ante-nuptial contract, if applicable;
The latest rates/levies account.
Be sure to disclose the true state of your financial affairs in your loan application, which will enable the potential lender to determine whether or not you will be able to afford the loan repayments. Bear in mind that all lenders are obliged to comply with the National Credit Act, in terms of which only around 30 percent of your monthly income can be assigned to pay off debt.
All mortgage lenders will do a credit check to ensure that you have an acceptable credit record.
The potential lender will also assign an independent valuer to assess your property. This is to ensure that the loan amount that has been requested is supported by the value of the property.
Once your bond has been approved, the lender will insist that you take out insurance on the property’s structures, as well as additions such as walls, paving and pools, so that you are covered in the event of a fire, flood or other major disaster. However, you are not obliged to sign the insurance contract that the bank presents to you and, again, can shop around for the best deal.
In most cases for sectional title properties, this insurance is not necessary as your premium is included in the monthly levy that is payable to the body corporate.
You may also be encouraged to take out mortgage protection cover to protect your family and home in the event of the death or disability of the major breadwinner. This is a very practical cover as it will settle your outstanding bond should you die or become disabled.