Preparing For A Home Loan Application
In order to buy or build your home, you will need to take the important step of securing a home loan.
Contrary to popular belief, buying property does not start with looking at a house within your budget.
The idea of securing a mortgage is overwhelming for many potential homeowners. To make this process relatively simple and stress-free it’s a good idea to know what to look for and where to apply ahead of time. Often, if you need to apply for a home loan, it’s worth preparing months in advance.
Lenders use a range of factors to determine whether to give you a mortgage or not. There isn’t one simple, cover-all, solution for a successful application. However, at PropertyFox, we’ve put together some tips that could boost your chances of obtaining a home loan.
Make sure you have regular income showing on your bank statement. This will speed up the process. If you are moving employment or going self-employed, try to delay this until after your mortgage is in place. Lenders need to see stability -a recent job move does not signify this. However, a promotion or significant increase in salary will give a shine to your application.
Get things in order. Keep regular tabs on your credit, in order to track your debt-to-credit ratio. If it’s too high, monitoring your score over time can show you how to bring your score down. A credit check could pick up suspicious activity attached to your I.D. number investigate this immediately. If you discover accounts that you didn’t open or addresses that aren’t yours, take immediate steps to combat what could be identity fraud. You will struggle to explain this away to a lending bank if you have not taken steps.
Make sure to pay bills on time. Having an impeccable credit history, is no reason to drop the ball and forget or ignore bills because you are overwhelmed by all the paperwork you must do in the run-up to your application. Your borrowing records are ongoing, so any slip-ups before you apply for a mortgage would show the lender that you do not perform well under stress, and future events may render you unable to meet your loan repayments.
Cut out any unnecessary borrowing. Try not to open new credit lines in the six months before applying for a mortgage. This could increase your debt-to-income ratio, which will reflect badly on your ability to repay any loans.
The idea of securing a mortgage is overwhelming for many potential homeowners.
Compile your documents. Lenders typically ask for a lot of information when you apply for a loan. The more information you can provide, the better your chances of getting approval. It would be wise that you keep the statements for all your loans and credit cards, as well as pay slips, tax returns and anything else.
You will also need to understand the market you’re buying in. In some cases, the types of loans you can get depend on the market you’re purchasing in and the type of home you buy.
As the person applying for a mortgage, you will need to do homework for yourself. You’re finding a home but you’re also making a financial commitment you’ll have to live with for years: get the best deal you can. Research loans and rates exhaustively before you sign or commit to anything. Doing the hard work now will pay off down the road with a better rate and terms.
Applying for a home loan doesn’t have to be a struggle. Know your options. By gathering information ahead of time so you can avoid unnecessary stress and get yourself into your dream home that much sooner.
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Preparing For A Home Loan Application
Drought is a very real threat in South Africa, as those in the Western Cape – and indeed other parts of the country – have experienced.
While the past few months have seen the Western Cape experiencing generous amounts of rain, it still seems as if we are far from being safe from the water crisis.
Meanwhile, the Western Cape Disaster Management Centre has recommended that water restrictions be implemented across the province during the rainy season until the dam levels have increased to acceptable levels. Water is a scarce resource in our country and it has been predicted that the Western Cape will be the first region to run out of water unless steps are taken to manage the demand for water more efficiently.
There are several things you can do to reduce your reliance on your municipality’s water infrastructure which includes installing a borehole, well points or a rainwater tank. PropertyFox looks at how each of these systems that can be integrated into your home.
Western Cape Disaster Management Centre has recommended that water restrictions be implemented across the province.
A borehole is a long narrow shaft that is drilled into the ground to locate and extract underground water. According to the Borehole Water Association of Southern Africa, you need to contact your local municipality to find out if you can drill a borehole in your area.
An annual water quality test is vital if you are planning on using the borehole water for human or animal consumption.
Most of the areas in the Western Cape have a relatively good underground water supply and consequently makes it easier to locate a borehole site that will provide sufficient water for use. Also, the fact that the Mother City receives sufficient winter rain makes it an ideal candidate for groundwater abstraction during the hot and dry summer months.
The costs to drill a borehole vary, based on how deep it needs to be and the amount of casting that needs to be used. The average drill costs around R600 a metre.
This is a polyethylene pipe with a filtered end installed into a porous soil structure. The water is then distributed by means of a surface-mounted centrifugal pump. This system takes around two to four hours to install. Should the ground structure allow, well points can go between 8 to 12 metres deep. With the use of private well points for irrigation, the city’s water supply burden is then lightened with considerable water and financial savings as well as adding value to your property.
Costs for installing this system vary from company to company with standard prices starting from R6,500 and up.
A rainwater tank is used to store and collect rainwater that typically comes off the roof of your home or rain gutters. Rainwater tanks range in size from 1,000 to 5,000 litre containers, giving you an opportunity to choose one that makes the most sense for your home.
Rainwater is free and untreated, so it has less of a carbon footprint. It is illegal to connect a rainwater tank to the drinkable water supply system, so it is best for use for your washing, cleaning, watering or topping up your pool purposes. Rainwater tanks may also be plumbed to feed toilet cisterns and so reduce the considerable amount of water used daily for flushing.
Costs for the installation of a rainwater tank vary between R8,000 and R15,000 for a 4,000 litre tank.
As water is a strategic, precious and scarce resource, it is our responsibility to minimise the use of water in our gardens and to look at alternative water resources to help minimise the risk of a drought. So, whatever water saving mechanism you choose to go with, make sure that the companies and experts that you hire have the necessary certification to prove that they can do what they claim they can do.
At PropertyFox, we are dedicated to making sure that you get a home that suits your every need. Call us today and we will take it from there.
PropertyFox is South Africa’s leading smart real estate agent: striving to do things differently and providing excellent customer service through sharing information openly and honestly to ensure their clients are always in the know.