FAQ

You can certainly acquire another property by borrowing against your house. This can be achieved by accessing the equity available in your home loan, where you use the value of your current home to secure funds for a new purchase. Alternatively, consider a refinance loan or switch loan, which allows you the opportunity to maximise your existing mortgage and potentially access additional funds. Leveraging the equity in your home can provide the financial boost needed to invest in another property and grow your property portfolio. To find out how much you could access for a new property, try our Home Loan Switch Calculator.

Pre-approval for a mortgage involves a lender reviewing your credit report to assess your financial situation. This is generally considered a soft inquiry, which does not impact your credit score. Unlike hard inquiries, which occur when you formally apply for credit and can slightly lower your score, soft inquiries are only visible to lenders  and do not affect your credit rating.
However, it's important to note that when you proceed with a full application, the lender will conduct a hard inquiry, which may impact your credit score. For more details on the impact of credit inquiries, visit Experian, XDS, or TransUnion.

To clear your name from a credit bureau in South Africa, begin by obtaining your credit report from reputable bureaus like Experian, TransUnion, or XDS. Review your credit history carefully for any judgments, defaults, or errors that may have resulted in being blacklisted. Ensure you settle all outstanding debts and verify that your creditors update and correct their records.

If you were under administration, you will need a clearance certificate from your debt counsellor or administrator. This document confirms that all your debts have been settled and the debt review process is complete. Submit this certificate to the credit bureaus to update your credit record. Regularly monitor your credit report to ensure all corrections are accurately reflected.

A bond allows people to buy property without paying the full purchase price upfront. Instead, they apply for a home loan from a lender, who evaluates their creditworthiness, income, and the property’s value as part of the mortgage process. The monthly repayment amount includes both capital and interest, which the borrower agrees to pay back in monthly instalments, over the loan period – which is usually 20 to 30 years. Paying off the home loan sooner reduces interest costs. If the borrower fails to repay, the lender can take ownership of the property to recover the debt. This home loan process ultimately helps an individual to secure ownership for residential property.

Home loan interest rates differ from person to person, based on their risk profile. Lenders assess factors such as affordability and credit profiles to determine your rate. These rates can be fixed or variable over the loan term. The amount you borrow includes the cost of the property, or principal amount, plus interest . Initially most monthly payments  go towards paying off the interest, with less towards the principal balance. As the loan progresses, more of your monthly payments reduces the principal amount. Understanding mortgage interest types and your risk profile helps you secure the best rate and manage your payments effectively.

The larger the deposit, the better. Understanding the mortgage deposit requirements are important when buying a home. Even though some lenders offer 100% bonds, it’s wise to save for a deposit as a larger deposit means borrowing less which can result in a better interest rate and lower monthly instalments.  For a first-time buyer, a typical deposit for a house ranges between 10% and 20% of the property price, though any deposit is beneficial. Putting down a deposit demonstrates commitment  to the seller and improves your chances of a loan approval, as you are seen as a lower risk to the lender.

To qualify for a home loan in South Africa, lenders will assess your credit and affordability to determine your risk, and the interest rate you will receive. A strong financial profile increases your chances of qualifying for a mortgage loan. Consider these simple tips for home loan qualification: aim for a favourable loan-to-value ratio by saving for a deposit, and ensure your income comfortably covers your existing debts. Check your credit record before applying and resolve any issues. It’s wise to know how much you can afford before starting your property search. When you’re ready, contact a reputable lender like SA Home Loans to ask for a pre-approval to begin your homeownership journey.

Maintaining a good credit score is essential for securing a home loan. To improve your credit score, start by establishing a reliable income and opening a manageable credit account, like a clothing account. Pay your instalments on time, as even a single missed payment can negatively impact your score. Prioritise paying off credit cards, which carry higher interest rates. Close any unused accounts to avoid dormant data affecting your credit profile. Avoid using credit to pay off debt, as this can signal financial strain. Regularly check your credit score to monitor progress. Following these credit score tips will help meet credit score requirements.

Your credit score is crucial for securing a home loan and is calculated based on various credit score factors. It reflects your borrowing and repayment history, influencing lenders' decisions on your application. A good credit score, often around 700 or higher, indicates responsible credit management and positively impacts your loan approval chances. Positive factors include payments made on time and managing debt repayments responsibly, whilst missed payments, defaults or judgements or high credit usage can hurt your score. To improve your credit score, start with manageable credit purchases and pay more than the minimum required. Regularly check your score for accuracy and resolve any errors.

Determining your home loan affordability is a crucial step in the home-buying process. In South Africa, lenders typically ensure that home loan repayments don’t exceed 30% of your combined household income, with repayment terms averaging 20 years (240 months). If your income alone doesn’t qualify, you could consider applying jointly with your partner or someone else in your household to increase affordability. This shared financial responsibility can improve your chances of securing a loan. Saving for a larger deposit can also reduce monthly repayments. Use our home loan affordability calculator to estimate what you can afford to meet your home purchase requirements.

To apply for a home loan in South Africa, several factors are considered, including affordability, credit behaviour , and more. For home loan eligibility, we require a minimum household income of R8,000 and finance home loans ranging from R100,000 up to R6,000,000 . Ensure you have necessary documents like proof of income and bank statements available. A healthy credit history also plays a significant role in securing a loan. Review the mortgage requirements and ensure you meet the mortgage application criteria to increase your chances of approval.

When buying a house, transfer fees and transfer duties are key property transfer costs. Transfer fees are paid to conveyancers by the buyer  for managing the name change on the title deed of the property. Sometimes, a buyer  can negotiate these home buying transfer fees, especially if the attorney also handles bond registration. In contrast, transfer duty is a government tax paid by the buyer. This tax, collected by a transferring attorney, must be paid to SARS before the property transfer is recognized. Understanding these costs when buying a house helps ensure a smooth transaction.

Transfer duty is a tax imposed by the South African government on the transfer of property ownership from the seller to the buyer. It is a mandatory fee paid to SARS (South African Revenue Service) and is calculated based on the property's purchase price or market value, whichever is higher. Understanding transfer duty is crucial as it adds to your property transfer costs and is separate from other fees. For private buyers the transfer duty is calculated on a sliding scale, with higher rates for more expensive properties. While legal entities, like companies or trusts, pay a fixed percentage. For current rates and a detailed breakdown, visit our website: What Fees Can I Expect to Pay.

Deciding between renting vs. buying comes with various considerations. Benefits of renting include flexibility and lower upfront costs. You’re not responsible for major repairs, and it allows you to save towards your own property for the future. However, renting means monthly payments contribute to someone else’s pocket, and you face potential lease terminations.

On the other hand, buying a home builds personal wealth and equity over time, and offers stability and control over your property. Owning a home can also provide rental income opportunities. For a more detailed comparison of the pros and cons on both options, check out our article on Renting vs. Buying.

Yes, your bad credit score can impact your spouse’s ability to buy a house, particularly if you're married in community of property (COP). In a COP marriage, both spouses share assets and liabilities, meaning your credit score is assessed alongside your partner’s when applying for a joint home loan. This could lead to higher interest rates, or the loan application being declined. However, if you’re married with an antenuptial contract (ANC) and only your husband applies for the loan, his credit score will be the primary factor. Addressing credit issues early on can significantly improve your chances of securing a home loan, regardless of your marital status.

For more guidance, contact SA Home Loans at 0860 2 4 6 8 10.

Qualifying for a home loan when you have  a poor credit score is challenging, especially if you are blacklisted or have judgments. Our approval process adheres to the National Credit Act and involves a comprehensive assessment of your credit profile. Major credit bureaus  like Experian, TransUnion, and XDS emphasize that a good credit score is essential for a successful home loan application. A poor credit score may lead to higher interest rates or worse, your application being declined. To improve your chances of approval, start by checking your Credit Report and rebuilding a healthy credit profile. For further guidance or assistance, contact SA Home Loans at 0860 2 4 6 8 10.