Remember that affordability is key

One of the most important factors taken into account when lenders assess loan applications is affordability. Gross income, net income and fixed monthly expenses are important factors. The more disposable income available, the more likely the home loan will be approved.

Have a deposit

The standard requirement is a minimum 10% deposit of the asking price of the home. If you want to improve your chances of qualifying for home loans in South Africa, the best way of doing this is by paying a large deposit. Some lenders also offer 100% home loans to the low-income sector of the market.

Have a favourable credit rating

When you apply for a home loan, a lender will run a credit check in order to determine how well you’ve managed your credit in the past. Managing credit accounts well will improve the chances of home loans approval.

Provide proof of a steady income

Generally, consistent income over the last three years is assessed. If you can prove that you’ve been in steady employment for at least two years you may improve your chances of qualifying for home loans in South Africa.

Pay down debt and avoid new debt

The less you owe your creditors, the better. It’s also important to avoid accumulating new debt when you are applying for home loans in South Africa. You’ll improve your chances by having a low debt-to-income ratio.

Know what you can afford

Before applying for home loans you should make sure that you do the math. Work out how much you will really be able to afford. Aim to keep your housing expense within your means. Once you’ve done this, get pre-approved. This will give you a clear idea of how much you can expect to pay towards home loans in South Africa.