How to apply for a home loan in SA in 7 easy steps

How to apply for a home loan in SA in 7 easy steps

If you’re unsure how to apply for a home loan and what the process entails, our step-by-step guide will simplify the process so you can apply with confidence.

Article summary

  • Start the home loan application process by determining what you can afford.
  • Check your credit record to determine your chances of having your home loan approved.
  • Use a home loan comparison service like O-YES Home Loans to get the best deal on your home loan by submitting your application to multiple banks.

So you’ve decided to make your dream of home ownership a reality? As you may be aware, the home loan is the means by which you fund a home purchase. The lender, usually a bank, provides the funds to cover the home purchase, which you then pay back in monthly repayments plus interest.

But maybe you’re unsure how to go about applying for a home loan? Don’t be intimidated by the process. Our step-by-step guide to home loan application shows how simple and straightforward it really is.

  1. Determine what you can afford
    Before embarking on your house hunt, it helps to know how much you’ll qualify for.
    We provide a free, online tool that enables you to do just that. Our Bond Calculatorlets you enter your monthly income, total monthly expenses, and the term and interest rate of your loan; then calculates what you qualify for and what your monthly repayments will be based on that information.
  2. Get prequalified
    Prequalificationwill also give you an idea of what you can afford, and provide you with a prequalification certificate that you can show to estate agents.
    It will also provide you with your credit record, which is helpful since your credit record will be the most important factor that the bank takes into account when considering your home loan application. This way, you’ll know whether you should take some steps to improve your credit record before applying.
    You can get prequalified with us, either by contacting one of our prequalification experts, or by using our free, online prequalification tool.
  3. Find a property you like
    Of course, before applying for a home loan you’ll need a property to buy. An estate agentcan be an invaluable assistant in helping you find a property that meets your requirements.
    Try to attend house viewings instead of just relying on photos of a property; so you can get a more accurate picture while getting a feel for what it’s like to live in the home.
  4. The Offer to Purchase
    Once you’ve found the property you want, you need to agree terms with the seller. This is called the Offer to Purchase, and signing it commits you to buying the property.
  5. Submit the necessary documents
    Now that you’ve identified the property you want and signed the offer to purchase, it’s time to begin the home loan application process. This requires you to submit a number of documentsto the bank with which you are applying. These will usually include:
    * A copy of your ID.
    * A copy of the Offer to Purchase.
    * Proof of income.
    * Six months worth of bank statements.
    The bank will assess your credit record to determine whether your home loan should be approved, and how high your interest rates should be if it is.
  6. Use a home loan comparison service

Don’t just apply to one bank, apply to multiple banks so you can see which ones offer the best deals.

Accomplish this with the help of a home loan comparison service, such as O-YES Home Loans. We are the one of the largest home loan comparison service in South Africa, and we have relationships with all the major banks. We can ensure you get the best home loan package with the lowest interest rates.

  1. Prepare for the legal processes

The bank will review your credit record when assessing your home loan application in order to determine whether your home loan should be approved, and how high your interest rate should be if it is.

The bank will appoint a bond attorney to register the bond, and the property seller will appoint the conveyancing attorney to handle the transfer of property.

You will need to pay the fees for the bond registration and transfer of property (and transfer duty if the property is worth more than R1 000 000), so bear in mind these additional expenses.

You can use our Transfer Cost Calculator to determine what the bond registration and transfer costs will be, based on the size of the home loan.

We make the home buying process easier…

If you are just thinking about buying a home, or are ready to put in an offer, O-YES Home Loans gets you the best deal on your home loan – for free. To make the home-buying process that much easier, O-YES Home Loans also offers a range of home loan calculators to help make the home-buying process easier. Get prequalified for a home loan with O-YES Home Loans, then, when you’re ready, you can apply for a home loan with O-YES Home Loans.