if you are even three or four days late with your rent
every month, for example, it will show up on your
credit record. That could make it look as though you
are struggling to make ends meet and would not be
able to cope with any more credit.
*Clear up any serious defaults and debt judgments
and make sure they have been removed from your
credit record once you have paid them off. Most
lenders will not even consider you for any new loan
unless you do.
*Make sure that you have a clear record of
income, supported by pay slips if you are in full-time
employment or by bank and financial statements
and tax records if you are self-employed. Ask your
mortgage originator to review these and your
monthly expenditure with you and help you work
out what size home loan you might be able to afford.
*Pay off as much of your existing debt as possible. If
you have a large student or personal loan outstanding,
an unpaid tax bill or a big car repayment to make
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every month, there is a big risk that your income
won’t stretch to also cover a home loan instalment
every month. So you might want to consider
renting a cheaper place, taking on a weekend job or
downsizing to a cheaper car – whatever it takes to get
that other debt paid off.
*Save up a sizeable deposit. Once you have an
idea of what price home you could comfortably
afford, you should aim to have at least 15 to 20% of
this amount available in cash before you apply for a
loan. Even if you don’t use it all as a deposit, saving
diligently will demonstrate to lenders that you are
financially responsible. It could also help you secure
a loan at a lower interest rate, which would save you
many thousands of rands over the life of your loan.
RESOURCES
Betterlife home loans
Residential Handbook 2016/17
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