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7 November 2019
When you buy property for the first time and apply for a home loan, you are bound to be anxious and worried about the process. There are so many things to think about – what documents do you need, how long does it take, and in whose name should the home loan be? All of that can leave you feeling discouraged, but with the tips we're about to share, you'll be able to start the process with confidence.
Step 1: Can you afford it?
Before you start a home loan application, you need to figure out what you can afford. Take a good look at your finances to see if you can afford a home loan on top of your current expenses. You can check by using our calculator as a guide. Also remember to pay your credit card (or any other accounts) in time to ensure you keep a good credit record. You can get a free credit check online from TransUnion or My Credit Check.
Step 2: Finding a home
You need to have a property in mind when you apply for a home loan, so the bank knows what you need. Chat to an estate agent and look at properties for sale before you apply for a loan. Keep in mind that looks can be deceiving. If you see something you like online, make an appointment for a viewing.
Step 3: Submitting documents
Now that you know what you can afford and that your credit record is in order, you can start your application. When applying for a home loan you will need documents such as your valid South African identity card or document, proof of your income, a list of your expenses, an offer to purchase (also known as a sales agreement), as well as your banking details. Use this checklist to help you get your ducks in a row.
Step 4: Waiting for the outcome
The loan approval process can take up to two weeks once all the required documents have been signed and submitted.
Step 5: Legal stuff
Once your home loan has been approved, the transfer process of having the property registered in you name is next, and you'll have to pay transfer fees. This could be quite expensive, so remember to make provision for this, as transfer fees are not always included in your home loan. Before you sign your application, find out if transfer fees will be included in your loan or not.
This information is intended for general information purposes only and does not constitute legal advice.
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