Just can't get the banks to give me a home loan

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.

Standard bank and 100% Homeloans

It has been quite some time since the banks have offered 100% loans unless you were a client

of theirs and the good news is there seems to be a swing in the opposite direction.

Is this because the mood and sentiment is at a low ebb and clients are moving away from there traditional banks for other savings havens?

Never sure, but the decision by Standard bank to offer 100% home loans to non- standard bank clients in April 2013 is a definite positive swing.

so what do banks offer in general:

Firstly, this changes often so call your broker or call your mortgage originator first,

But as it stands: Remember other conditions always apply.

Standard Bank 100% home loans to all
FNB - will consider 100% home loan to all but favour their own clients
ABSA - will consider 100% home loans to all, but favour there own clients
Nedbank - Only for Nedbank clients
Investec - for Investec clients or meeting strict criteria
SA Home Loans - will consider but more like a 90% loan

Other kinds of offers in general are - These can change

-       Investment property usually max. 75%

-       Self employed clients usually max. 85%

-       Foreign applicants with no green ID books max. 50%

-       Foreign applicant married to South African max. 50 -75% (South African must be higher income earner)

-        Vacant Land 60%

FNB property barometer some interesting news

Square metres of residential building plans passed vs completions 

Preparation is Key to Getting a Loan

It is definitely a myth that there is no funding available for entrepreneurs, as there is without question more funding than ever before available to entrepreneurs in South Africa. If you are in the market for a personal loan or need a loan to get your business off the ground and have not being successful in securing a loan is often the main reason why entrepreneurs often put off going it alone or individuals simply give up on trying to secure a home loan, personal loan or other much-needed finance.

Take note that not all businesses suit all financiers. Many entrepreneurs will soon become frustrated trying to access funding because they are not being successful. Many successful business owners will admit that they asked numerous funders before getting the finance they were looking for. This is usually due to a number of factors ranging from being unsuitable to not having all their ducks in a row.

Entrepreneurs usually learn from trial and error and adjust the sales pitch to the lender. One way to increase your chances of getting financing is setting up a pre-pitch meeting with the lender. You need to find out exactly what it is that they are looking for and what you as an entrepreneur can tweak and change to increase your chances of getting funding.

There are usually areas that you have not even thought about and you would not have been in a position to answer certain questions in an interview. Preparation is all-important when asking for any type of loan.

Funding is usually the bugbear of most entrepreneurs and the general consensus is that there is no funding – but this is simply not the case at all.

You can always bootstrap your business – did you know that many of the most successful businesses globally were launched on a wing and a prayer and no outside funding whatsoever? Alternatively find the right funding medium that suits your business but ensure that you get everything ship-shape prior to pitching to your funders.

If you are in the market for a personal loan, a loan for your business or a home loan, it is always wise to prepare well prior to giving your pitch.

FNB Home Loans Update - From Head Office

FNB Housing Finance is excited to announce that we have now officially joined Home Loans and
other banks in rolling out Interbank Document and Data eXchange (IDX) for our customers.

IDX is an interface which allows bank agents (within FNB) to request bank statements from all
other banks using a specified criterion. The purpose of this crossing point is to eliminate the
lengthy and unpleasant process of having to ask and wait for customers to bring their monthly
statements from banks which they hold their personal active account/s in order for their “loan”
requirements to be considered. Furthermore, this also allows the affected bank to be privy to
information which the customer might withhold/omit that could prove to be troublesome at a later
stage.

For now, customers are allowed to opt not to partake in this roll out but it will be mandatory at a later
stage. We request that you utilise the existing (applied by other banks) form for all FNB Housing
Finance customers who would like to involve themselves in this roll out.

Thank you for your continued support.