Many individuals are nervous to apply for home loans these days. They are expecting a big, nasty No. Some won’t even try, out of fear or getting a decline. However, there are some simple steps you can take to drastically improve your chances of an approval.
Home Loans Approvals Tip 1 - Service All Your Financial Commitments On Time
The bank's home loans department will look at the conduct of your existing accounts, and use that information to decide whether or not you will pay your home loan as you should. If you have been irresponsible with your existing accounts they assume that you will be the same with home loans. So make sure you have paid all your accounts regularly for some time before you apply for home loans.
Home Loans Approvals Tip 2 - Reduce Your Amount of Debt
Another point the bank will look at is your debt to income ratio, which means how much debt you have to repay with your nett salary. If you are using most of your income to pay back debt, they might consider you overcommitted. Try to reduce your amount of debt. This will improve your affordability and your debt to income ratio. The banks are much more willing to approve home loans to clients with less debt.
Home Loans Approvals Tip 3 - Employment History
The banks will consider your job stability. Getting approved home loans is much more likely if you have been employed at the same company for two years or more. If you are in the process of buying a property and want to change jobs – wait with resigning until the home loan application is complete.
Home Loans Approvals Tip 4 - Savings
Save up for a deposit and a bit more. This shows the bank your commitment to this property investment, and that you are responsible with your finances. If you are renting at the moment, it is very likely that your home loans installment will be higher than your current rent. So put the difference away in a savings account. This will help you save, and to determine whether you are able to afford your new monthly expense.
The main point is that all the bank is interested in is to get the amount they have lent you back. They will scrutinize your financial conduct up till now to determine whether they can trust you to do this or not. Home loans are definitely not impossible to obtain, and with these simple steps you are that much closer to owning your own home.
Well, I know that is a lot for you to take in so I am happy to spend some time with you and answer any questions you have about choosing home loans. You are very welcome to contact my office at 086 110 6204 or send me a personal email at: info@gpfmortgage.co.za
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