The process of getting finance approval for your new home is a very important part in the train of home buying events.
It is important to make it as easy as possible for the lender to approve your home loan. This means getting all the information and documents ready, even before submitting an offer to purchase a home.
Personal Documents And Information
The lender will want to see certain personal documents when a buyer submits an application for a new home loan.
If the buyers plan on taking transfer of the property in their own capacity as natural persons, a lender will require the following documents for all the buyers (This includes a spouse if married in community of property):
- copies of Identity Documents, for identification and proof of South African residency;
- Pay-slips as proof of income, or a letter from the employer confirming employment and remuneration for salaried persons;
If the buyers are self employed or earn commission, lenders will require:
- Up-to-date financial statements;
- Up to six months' bank statements.
Company Documents And Information
For a loan application by a company or close corporation, lenders may require:
- A copy of the Memorandum of Association for a company and a copy of the CK1 Form (The Founding Statement) for a close corporation;
- A copy of the Articles of Association, the Certificate of Incorporation and the Certificate To Commence Business for a company;
- the original authority to apply for a loan and hypothecate property on behalf of the company or close corporation (where applicable);
- a copy of the Identity Document for the authorised person.
To prove the income and capacity to service the home loan, lenders may require:
- Up-to-date income statements and balance sheets;
- Up to six months' bank statements.
Trust Documents And Information
When the trustees of a trust apply for a loan, lenders may need:
- A copy of the Trust Deed;
- Copies of the Letters of Authority issued to the Trustees by the Master of the High Court
- A copy of the Identity Document for the trustees
To prove the income and capacity to service the home loan, lenders may require:
- Up-to-date income statements and balance sheets;
- Up to six months' bank statements.
Documents And Information About Guarantors
If the buyer has good reason to believe that the lenders may request additional surity based on the financial state of the buyer, it would be wise to get the documents and information for the guarantors in order as well.
These documents should not be submitted before it is requested by the lender, because it might cause the lender to insist on the extra surity, even though the buyer meets the loan servicing requirements on its's own.
Getting Finance
If all the documents and information is at hand, there should be very little reason for any delays in getting finance. Remember that a home loan requires a property valuation to be performed. This may take a few days.
