If you are battling to get a bank to give you a home loan, there is a definite formula to get past this; building up a good credit record is of course the first step in the right direction.
First things first - you will need to build up a good credit record. Many of us are freelancers or work for ourselves – and this is often a huge obstacle if you need to get credit, whether for a home loan or credit for other uses and needs.
Financial institutions want to be certain that you will be in a position to pay your home loan without any problems or difficulties. This is the reason why they scrutinize all your finances really closely and also examine and analyse your income and expenses by using an average on your earnings over a six month period to determine whether you will or will not be able to afford the monthly installments.
If you earn commissions, are a freelancer and your monthly earnings fluctuate, banks will adjust the average earnings down to cater for these ups and downs and will give consumers a fair opportunity to meet the loan agreement.
Banks and lenders always choose the more conservative approach to ensure that applicants will be able to cater for fat months as well as lean months.
If you are thinking of applying for a home loan chances are that the financial institution you approach will go as far back as two years into your credit history. This is to find out whether you are a good payer and up to speed on all your credit agreements. This information is then used to calculate their risk in lending you the money – but there is nothing that formally states that borrowers need to have a credit history to qualify for a home loan.
A problem will aris is if you have no credit anywhere and you have an income that fluctuates due to the fact that you are a commission or freelance worker; you will then have issues trying to get that essential home loan.
Wizard Midrand is here to assist and to guide individuals no matter how they earn their bread and butter – let us take your home loan to the next level; our professional team will do all the leg-work on your behalf, bringing you closer to owning that dream home you always longed for.