If your home loan application was rejected because of affordability concerns, here are steps to consider

Home loan rejections due to low credit scores can be disheartening. In this article, we outline strategies to boost your credit record and explore alternative paths to homeownership, including the First Home Finance subsidy and using a home loan comparison service.

Enhancing Your Credit Record:

Your credit record plays a pivotal role in home loan approval. It’s represented by a three-digit number reflecting your financial health. Aim for a credit score of at least 610 to secure a home loan. Here’s a breakdown of credit records:

  • 781 to 850: Excellent.
  • 661 to 780: Good.
  • 610 to 660: Fair.
  • 500 to 610: Poor.
  • 300 to 499: Very poor.


If you have a low credit score, consider these steps to improve it:

  • Scrutinize credit reports for errors and challenge inaccuracies.
  • Settle outstanding debts.
  • Maintain a credit utilization ratio below 30%.
  • Keep in mind that credit record improvements may take around three months to register.


To gauge your credit record and loan approval prospects, you can get prequalified with O-Yes Home Loans. Contact an expert or use the free online prequalification tool, the Bond Indicator.

Applying for the First Home Finance Subsidy:

The First Home Finance subsidy, formerly known as FLISP, targets first-time homebuyers with limited incomes. If your application was rejected due to insufficient income, this subsidy can be a lifeline. The government provides subsidies ranging from R30,001 to R130,000, with higher subsidies for lower incomes.

Qualification criteria for the First Home Finance subsidy include:

  • Monthly income between R3,501 and R22,000.
  • South African citizenship with permanent residency.
  • No prior government housing subsidy.
  • Marriage, cohabitation, or single status with financial dependents.
  • Age above 18.
  • No prior ownership of a fixed residential property.


After qualifying for the subsidy, reapply for a home loan. Banks are more likely to approve your application knowing you have additional funds through the subsidy.

Note that you can apply online for the First Home Finance subsidy with O-Yes Home Loans.

Using a Home Loan Comparison Service:

Different banks have varying lending criteria, and some may be more receptive to your home loan application than others. If one bank has rejected your application, consider applying to another.

Utilize O-Yes Home Loans’ services to streamline this process. We can submit your application to multiple banks, increasing your chances of approval and allowing you to compare offers. O-Yes Home Loans also provides tools like the Bond Calculator and Bond Indicator to simplify your homebuying journey.

Don’t lose hope if your home loan application is denied; explore these options to enhance your chances of realizing your homeownership dream.