Boost your Chances of Becoming a Homeowner with Bond Pre-Approval
By applying for pre-approval you not only speed up your bond application, but also increase your chances of bond approval
02/03/2022
The saying “being prepared is half the victory” is especially pertinent when it comes to applying for a bond. Bond approval depends largely on what you can afford, so it's important to have an idea of your recommended price range based on your income and expenses before you start looking at homes to buy, says Carl Coetzee, CEO of BetterBond. “The process of purchasing a new home is faster simply by applying for pre-approval in advance, plus your chances of getting bond approval increase."
The BetterBond pre-approval certificate includes the highest purchase price you can afford, as well as your possible bond repayments based on various interest rate and deposit calculations
Pre-approval can be done
online at no cost, and at a time that suits you,
explains Coetzee. “The documentation submitted
is exactly that submitted for a bond application. The
information is captured by a consultant on the
other end, so the process is simple and easy.”
As this information is stored on your profile,
it can be used for your bond application if you
sign an offer to purchase within three months of
receiving pre-approval, says Coetzee. “Also, the
pre-approval application includes a credit
check, so you will know whether you need to wait
and improve your credit score before you apply
for a bond. Having a good credit score will
improve your chances of bond approval.”
Once your application is approved, you will be
issued with a pre-approval certificate that is
valid for 90 days. “While being pre-approved
gives you an indication of how much you can
afford to spend on a new property, it does not
automatically guarantee a bank's approval on a
bond or home loan application. Another reason
for applying for pre-approval is being able to
show that you are a serious buying when looking
at prospective properties and know that you are
within your budget” says Coetzee.
“This will strengthen your hand when it comes to
making an offer on your chosen home; giving you
the competitive edge when the seller has to
consider other offers.
The BetterBond
pre-approval certificate includes the highest
purchase price you can afford, as well as your
possible bond repayments based on various
interest rate and deposit calculations.
“Although banks are giving 100% loans and even
105% loans in some cases, bear in mind that
having a deposit does hold some sway when banks
decide whether or not to approve a bond
application. A deposit of even just 10% will
also go a long way to securing a better interest
rate,” says Coetzee. The pre-approval
certificate will also indicate additional
expenses, such as bond registration and transfer
costs.
The BetterBond pre-approval certificate includes the highest purchase price you can afford, as well as your possible bond repayments based on various interest rate and deposit calculations.
“BetterBond offers new homebuyers
a pre-approval
service that will provide you with an idea of
how much you can afford to spend on a house -
added purchasing
power, and this will also let you the amount
that you can afford to put down on the deposit. This makes it possible to save more over the
long term and put you in a better position to
respond to future interest rate hikes,”
concludes Coetzee.