Key things to know when it comes to home loans

There are a lot of people who are on the lookout for suitable home loans in South Africa. This is quite understandable given the fact that most people would like to own property of their own and would like to have an apartment, a condo, a house or perhaps a bungalow based on their needs and budget. Getting a house in South Africa is not tough, but you would do well to get to know of some of the basics as well as information on home loans in South Africa, in order to be able to finance your purchase and avoid any financial hassles later.

Initial requirements

These are known as pre-qualification norms or requirements that need to be met before a person can get a loan in South Africa. This is a process that involves documentation as well as credit worthiness check. The credit scores and reports are also taken in account so that the risk of default may be minimized. At the same time, there is a match done with the person’s loan amount and the ability to pay, so that the loan may not get denied or rejected by the bank or financial institution. One of the most important aspects taken into consideration is that of the income of the loan application. This is a process that can be quite rigorous and take time and effort being as important as it actually is.

Amount of Loan

One of the most important things for first time home loan takers is to assess their financial ability and also ability to pay back the loan. There is no point in taking a home loan in South Africa and then not having the means to pay it, leading to foreclosure as well as short sales. You need to be very judicious in this respect.

100 percent home loans

The quantum of loan as a percentage of the home loan cost is now inching back towards 100% in South Africa. The worldwide recession and sub-prime crisis has brought about a great deal of caution when dealing with loan seekers. But the situation is changing gradually, as the global economy limps back to some normalcy. There are now some banks and financial institutions that are veering towards offering 100% loans, though it has to be with checks and balances well in place. Gone are the days when rules and regulations were rather easy, because of the current regime of stringent terms and conditions

Special deals

As far as the South African property market goes, it is possible to get good deals on home loans, provided you are diligent as well as vigilant in looking out actively for these. You may have a to do a lot of research online as well as offline and keep your eyes and ears open for better interest rates or special promotional offers made available by some banks. Getting the best deals makes a lot of difference in terms of the total amount shelled out by you over the full term or tenure of the loan.

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