Get the key to your castle with a quick bond approval
Category General News
Securing a home loan or bond is a vital step in the process of buying a property. And while bond approvals have been dipping since the recent repo rate hikes, there's still hope. Kellaprince Properties has put together tips to help you fast-track your bond approval process and land you the keys to your dream home as effortlessly as possible.
1. Get your credit score in shape: Home loan providers want to see that you have a solid track record of borrowing and paying back your loans and accounts. You should review your credit record and ensure you have a score of at least 600. If not, you can get a free credit report from credit bureaus and work on creating a positive credit history. From paying accounts fully and on time, clearing debt, to using less than 50% of your available credit, there's a lot you can do.
2. Save towards a deposit: Banks are increasingly approving 100% home loans, and you can boost your approval chances even further with a deposit. This shows you're committed to paying off your loan and reduces the risk for your lender. It also has the added benefit of reducing the interest you'll need to pay off each month. How big should your deposit be? The larger the better but you should aim for at least 10%.
3. Get prequalified for a bond: This gives you an idea of how much you can afford, allowing you to narrow your search based on affordability. This takes away the stress of knowing how much you could potentially be given from your lender. Your prequalification will give you insight into your credit score and how much of a deposit you might need. A prequalification also places you in a favourable position with sellers as they will have confidence you can afford to buy their home.
4. Prepare your documentation: Gather all the necessary documentation required, including your ID, proof of residence, completed and signed application form, pay slips (proof of income), bank statements, and a copy of your marriage certificate (if married). Having these documents ready speeds up the application process and shows your preparedness to your lender.
5. Be honest and accurate: It can be tempting to flex further than you can in order to afford a bigger home loan. However, this can become a liability. Rather provide accurate information on your application form and be transparent about your financial situation. Lenders appreciate honesty, and any discrepancies may lead to delays or rejection. You will also have peace of mind knowing you can comfortably pay off your home loan over the long term.
6. Avoid any personal red flags: Besides your financial situation, lenders can also take other factors into consideration. You should try to keep your employment and residence constant as frequent job changes and movement can raise concerns and affect your bond approval. Also, keep your nose clean and avoid legal notices or court judgments. This can be a sign that you may not be able to cover your financial obligations out of negligence.
7. Maintain financial stability: Leading up to and during the bond application process, maintain a stable financial position. Avoid taking on new debt such as buying a new car or taking a loan for a holiday, make payments on time, and demonstrate responsible financial behaviour.
8. Use bond origination services: A bond originator takes the heavy lifting from your hands by shopping around and comparing bond offerings from different financial institutions. They know what lenders need for a successful bond application and ensure your application is ready for success. They submit your application on your behalf and also help secure a preferential rate as banks compete to offer the best deal.
Get on your real estate journey
Looking to take the leap into homeownership? At Kellaprince Properties, we're here to guide you every step of the way. Our experienced team of professionals can help you navigate the bond application process with ease. As local property experts in Mbombela (Nelspruit) and surrounding areas, we are ready to pinpoint a home that fits your needs and budget. View our properties for sale and get in touch today.
Author: Kellaprince Properties