With pre-approved home loans, the home buyer gets a certificate from a mortgage originator or a bank. This certificate serves as an indication what amount the bank is able to provide you, once your home loan is approved.
The pre-approved home loan certificate can be handed to the seller, with your offer to purchase. Doing this will increase your chances that the seller will accept your offer. The seller will feel more confident that your offer to purchase will not fall through.
This does not mean that you immediately qualify for a home loan.
A bank or a mortgage originator can issue pre-approved home loans. South Africa has a number of mortgage originators to assist you with a pre-approved home loan.
Step 1: Find a Suitable Mortgage Originator
The best way to find a mortgage originator is to ask friends and family or search the internet. Once you have a list of 3 to 5 mortgage originators, make your way to HelloPeter.
Check reviews on HelloPeter
HelloPeter is South Africa’s top review company. Here you are able to read reviews and get a sense of how each mortgage originator do business.
Go to their website, www.hellopeter.com, and enter the mortgage originator’s name in the search box.
Check the company’s overall rating. A star rating of 5 means the mortgage originator gets mostly positive reviews, while 1 star means the company gets mostly negative reviews.
Sort this list of yours from best to worst.
Check search engines
Start with the best mortgage originator on your list. Do a search of their name in your favourite search engine e.g. Google.
The first result in Google will most probably be their website. Google’s local listing (on the right of the results) might also contain some useful contact information such as their telephone number, email address and opening hours.
If the mortgage originator’s website does not appear in the first 10 results on Google, they don’t have a website. Rather move on to the next name on your list. The reason might be that the mortgage originator has closed its doors.
Contact the mortgage originator
Give the mortgage originator a call and ask if they will provide you with a pre-approved home loan. If not, move on to the next mortgage originator.
You can always give Homeside Home Loans a try to get your pre-approved home loan. We will do our utmost best to assist you to get the best pre-approved home loan possible.
You will have to provide the home loan consultant with the necessary documents.
Step 2: Submit the necessary documents to a mortgage originator company
You can either fax or email the documents to the consultant for a speedy process. This will also help you to finalise your home loan application once the buyer is happy with your offer to purchase. The mortgage originator already has the necessary documents to complete the home loan process.
Documents required for employed individuals:
- Proof of income: latest salary slip from your company. If you earn commission or over-time, provide the latest 3 salary slips.
- Latest 3 month’s bank statements from your bank
- Copy of your ID document
- Copy of your Marriage Certificate or ANC Contract, if you are married
Documents required for the self-employed:
- Proof of income: Letter of Drawings from your accountant stating your monthly income
- Bank Statements: Latest 6 months’ statements from your bank
- Business Account Bank Statements: Latest 6 months’ statements
- Latest 2 years’ Annual Financial Statements
- Copy of your ID documents
- Copy of your marriage certificate, if applicable
Where there are more than two buyers, each party must provide their own set of documents.
Step 3: Credit check and blacklist status of buyers
The consultant will do a credit check when he/she receives all the above-mentioned documents from the buyer.
It pays to know your current credit status. To get your own personal credit report from Kudough.
Kudough, www.kudough.co.za, is a credit status aggregator company and provides a complete credit report from 3 different credit bureaus such as TransUnion, Compuscan, XDS and/or Experian.
The South African credit law states that individuals can get one free credit report every year.
Kudough provides a free credit report, with limited information about your credit status as well as a comprehensive credit status report.
A comprehensive credit report from Kudough will cost you R89, once off. You can also opt for the monthly report at a discounted price.
Visit Kudough’s website to obtain your Kudough credit report.
Step 4: Submit documents to banks and quotes are compared
The mortgage originator consultant will send all your information to the banks to get a quote from them. During this process, the mortgage originator consultant will bargain and deal with the banks. Banks want your business and therefore a mortgage originator is able to get the best possible interest rate and the maximum home loan amount.
As soon as a consultant receives a feedback from the banks the following step starts.
Step 5: Get your pre-approved home loan from the mortgage originator
The mortgage originator consultant will provide you with a pre-approved home loan certificate.
As stated before, pre-approved home loans certificate can be provided with your offer to purchase to the buyer. This certificate informs the seller that your chances are very good to finalise the home buying process.
Homeside Pre-Approved Home Loans
Homeside Home Loans makes it quite easy to get pre-approved home loans.