Minimum income to qualify for a home loan
Several South African banks confirm that there is no minimum income to qualify for a bond. Banks use your income to determine the size of the bond that you do qualify for. The general rule is that banks will offer you a bond equivalent to the repayment of (33%) of your monthly income towards monthly installments. The installments will be calculated based of the interest rate you have been offered by the bank. This is based on the "repo rate" or prime interest rate, which is set by the SA Reserve Bank.
How does your credit rating affect your home loan application:
Every South African citizen has a credit record whether good or bad, all your credit transactions are documented and you are given a rating. Your bank will need your permission to access these records and since you cannot get a home loan without them scouring your credit worthiness, you may as well give it to them and get it over and done with. However you can also obtain these details yourself before submitting them to your bank so that you know what upfront what your chances are. You are entitled to a free copy of your credit record once a year. You can go to http://www.transunion.co.za/home.html for more information or to obtain your credit report. Your credit history can be a good thing as banks also decide which interest rate to give you based on your credit score and if it is good they will consider you a positive risk and you are more likely to get better offers from different institutions.
As a first timer you are afforded privileges, and the basic criteria to qualify is the following:
- Its needs to be the first time you're applying for a home loan
- You must be at least 18 years or older
- You must be permanently employed for longer than 6 months/self-employed for 2 years
Consult the Professionals
Find someone knowledgeable to assist you through this process, it could be your Estate Agent or your bond originator or both. The more Professional Advice/Help you can get the better. Always ensure that the Estate Agent of your choice is fully qualified and has an up to date EEAB certificate, Rogue Estate Agents can hurt you more than help you.