Pre-qualification can help you get a home loan


Pre-qualification can help you get a home loan

THE recently published Absa Home Owner Insights Survey has confirmed that the majority of home buyers should seek the guidance of an experienced mortgage bond originator prior to entering the market in search of a new home.

This is according to Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance.

“I would go so far as to say that those who go ahead with hunting for a home without first consulting a bond originator or a bank are setting themselves up for severe disappointments, considerable extra stress and much loss of time,” says Van Alphen.

He says the survey was carried out very comprehensively, and reveals that 37% of buyers have had to reassess their choices on account of having initially aimed too high above what they could afford.

“This would not have happened if, at an early stage, they had consulted with a bond originator rather leaving it to later when they may well have looked at and grown interested in a number of properties.”

In many cases, Van Alphen says it is a failure to appreciate the extent of the extra upfront costs, such as registration, transfer and initiation fees, which may make a reassessment necessary. He says this would not have happened had pre-qualifications been carried out with a bond originator, as all ‘hidden’ costs and repayment options are disclosed and discussed with the potential homeowner.

Then, too, Van Alphen says the bank survey shows that over 80% of home buyers are stressed by the whole home loan process and whether the bank will approve the loan.

These anxieties can be much reduced if, again, they pre-qualify themselves with the help of a bond originator, he says.

“The survey goes on to say that a staggering 57% are declined on account of credit and affordability inadequacies.”

He says this indicates that the initial investigation was not thoroughly carried out, and had the applicant liaised with a competent bond originator his or her chances of being successful would have been between 65% and 70%.
“One has to appreciate that the banks, having been badly burned in the previous downturn, are now operating with an understandable caution, but once this is fully understood, and with the help of a bond originator, a realistic approach is adopted, success in bond applications is not that difficult to achieve,” says Van Alphen. -