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Criteria for a Home Loan - 12 Oct 2009 11:40
Unless you are an overwhelmingly dangerous credit risk or are trying to obtain a home loan well above that which you can afford, your chances of  having your home loan application rejected are minimal. The key is knowing what criteria the financier will be checking and get those in order.A home loan application goes through thee approval phases, namely your personal profile, credit profile and the property you wish to purchase. Round 1: Personal Profile The first phase of your application (personal profile) will document your personal financial details. This round checks the stability of your income (is your income predictable and regular), your expenditure (the financier compares your income against the bond or loan repayments), your assets and liabilities (a comparison of your assets and their values is made to determine your Nett worth), your age (banks will work out your repayment according to age, estimating that your final payment be made at the age of 65), and collateral (values of insurance policies, stocks, shares and anything that has a material value that can be used as security for payment). Round 2: Credit Profile If you survive round one, the financier will then ask for a full credit history to be done on you. Credit reports via Experian and Transuion ITS will be requested to determine your credit behaviour and risk. You can check your own credit history now, with a free copy of your credit report. Make sure this is up to date and all blacklists or marks against your name are cleared up before the bank checks. ??Round 3: Property If you have made it through the first two rounds, the lender will evaluate the property with their own assessors to determine that it’s worth the value of the loan, and if sold for defaul on payments, will recover the full amount of the bond (ie is the property good security for the loan). They will also check the financials of the body corporate as well to make sure its in good shape. ?? The process is lengthy, but necessary. Your home loan will be the largest form of debt most people apply for in their lifetime, while also leading to your most valuable asset. Make sure your ducks are in a row before sending through the paperwork prematurely. http://www.homeloandeals.co.za/insurance-news/criteria-for-a-home-loan_234 |
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