Applying for a Home Loan

Immediately after you have signed the contract, make your application for a home loan.
When you are buying a home, financing your new home is one of life's major investment decisions.

When you purchase a new home it is likely that the estate agent will put you into contact with their preferred mortgage originator. Mortgage originators are not finance providers, but broker a home loan from one of the financial institutions. But ultimately you are still in control, you can cut out the middleman and shop around to choose whichever mortgage lender you prefer.

They will ask you for your identification, your latest payslip, bank statements, proof of any housing subsidy, and a copy of the sale agreement. All mortgage lenders will do a credit check on you to ensure you have an acceptable credit record.

The 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.

Be sure to disclose your true state of affairs in your loan application, to enable lender to make a fair assessment to determine whether you will be able to afford your loan repayments. Note that all Lenders are obliged to comply with the terms of the National Credit Act.

The lender will also insist that you take out insurance on your building and any additions such as walls, paving and outbuildings etc. so that you are covered in the event of a fire, flood, damage or any other major disaster. The insurance premium can be added into your monthly loan installment. In most cases for sectional title properties, this will not be necessary, as your insurance will be included in your levy and payable to your Body Corporate.

You may also be encouraged to take out mortgage protection cover to protect your family and your home, in the event of the death or disability of the major bread winner. This is a very practical cover that protects your home and your family, as the insurance will settle your outstanding loan should you die or become disabled.