As with anything in life, planning is key! If you are planning to buy a home, it is well worth-while having an expert take a look at your credit and affordability to avoid disappointment when applying to the banks.

Not only do we give you a the figures on affordability, we also advise. If we determine you are not affordability, stick with us! We will work with you to assist getting your finances in such a way that you CAN buy that dream home. 😁

A pre-approval or pre-qualification simply means taking a look at your credit status and looking at your income & expenditure to see what you can afford.

Our pre-approval process entails the following:

1. Quick one-page online information form with consent.

2. Our team analyses the credit report and checks affordability.

3. We give feedback on what we believe you can afford based on your credit score, credit exposure (how much debt you have versus how much you have paid off) and your income & expenses.

It is worth noting that a pre-approval or pre-qualification will always be an informal process. Bond originators AND banks do not proceed to the credit department (decision makers at the banks) for the purpose of a pre-approval. This is only done on application stage.

We use our industry experience and expertise to analyse and advise accordingly. This is why, the more information we have, the better your chances are of a successful application.

Depending on work load, a pre-approval can take up to 24 hours. Usually a lot quicker.

Although online calculators are convenient and quick, they lack one major aspect: experience!

We also use our own calculators, but we know what to include and exclude when looking at incomes and expenses. Furthermore, we provide step-by-step guidance on what the next step would be to help ensure the success of your bond application.

Your credit score is derived from various credit bureaus that keep track of the accounts and credit that you have. They link these accounts to your profile and not only keep an eye on how much credit you have, but also if you are keeping up with your payments.

The old saying of 'you need credit to make credit' rings true, especially in South Africa. Clients who have NO credit gets placed in the same bracket as clients with very bad credit.

This is because the banks base their lending risk on how well you repay your accounts. Having little to no history, makes it very difficult for the banks to judge whether you will repay them timeously.

A low credit score is a thorn in the side of a person applying for a bond. Fortunately, there are ways to build your score back up.

Lets break it down into two sections: Things that decrease your score and things that increase your score:

Things that decrease your score:

1. Credit reports: Every time someone draws a credit report on your profile, it leaves a footprint that affects your score negatively.

2. Little to no secured accounts: 'Unsecure' accounts refers to accounts without a linked asset. Like credit cards, overdraft accounts, personal loans, retail accounts etc.

3. High loan-to-repayment ratio: This refers to the amount you still owe on your credit versus the amount you have already paid off. Meaning you still owe allot compared to how much you loaned.

4. Missing payments: Missing a payment has the greatest negative impact on your score.

5. Debt review and Judgements will be discussed in another topic.

Things that increase your score:

1. Paying your accounts on time.

2. Having a limited amount of unsecured accounts. Less credit cards, retail accounts and personal loans.

3. Low loan-to-repayment ration: It either means you are settling accounts faster than required or that you have very few accounts that you owe allot on.

4. Secured accounts: Vehicle finance and home loans are the best credit-score builders.

In order to keep your score high make sure you NEVER miss any payments. Our checks track three years worth of data whilst the bank can see the last ten years+.

Although a staple for increasing credit scores, retail accounts and credit cards should be managed carefully. Try not to max out these accounts and pay them off quicker than required to bolster your credit score.

If you are currently under debt review, you cannot apply for bond finance at all. By law, the banks are not allowed to lend money to any person under debt review.

If you have recently been cleared of being under debt review, it is well worth doing a pre-approval with us to see how your credit and affordability looks. Also, we will check to see if the debt review status still reflects on your PCR (Personal credit report.)

IMPORTANT NOTE

If you have recently been cleared of debt review, it will be well worth contacting each banks 'debt review department' to ensure you are no longer under debt review on their system. Banks keep records separate from the bureaus. Which means they will decline your application based on debt review status, even though your no longer under debt review. You can clear this, by being pro-active in contacting the banks to get these status updated.

Debt review department contact details:

ABSA BANK:

• 0861005901

FNB:

• 0877301166

• FRBDebtReviewCentre@firstrand.co.za

Nedbank:

• 0860555111

Standard Bank:

• 0861111525

• 0861111402

• DRApplications@standardbank.co.za