Home Loan Tips
Most people don’t realize that it is possible to buy a home with spending a cent. With the local home loan markets becoming more and more competitive, banks are starting to lower their lending criteria.
Now more than ever it is relatively easy to gain the 100% home loans or even as much as a 110% mortgage – the extra 10% is used to payoff the bond registration costs.
Most often it’s first time home buyers who are looking for this type of mortgage.
If you have not owned a home before banks would generally consider the following factors before granting you a 100%-110% mortgage:
1) Credit Rating
2) Income
3) Assets
These three factors are key to any loan application, but the most important factor is your Credit Rating.
If you have a less than perfect credit rating chances are you’ll have to provide some kind of proof of extra income to qualify for 100%-110% finance. Banks, will use you income to prove that you can afford to payoff your home loan and thereby validate the risk they are taking by providing this larger home loan to a first-time home buyer.
By adding up all of your monthly obligations (credit cards, auto loans, mortgages, ect), then taking that number and adding it to the proposed new mortgage payment, and dividing it by your gross monthly income the bank is able to calculate your DTI (Debt-to-Income) Ratio.
The lower your DTI the better and if it is anything over 30% you will struggle to get your home financed.
Do I Qualify?
If all your debts are in order and your DTI is not too high you will be granted a 100 percent bond – or more – which will cover all the bond registration costs and the total purchase cost of your new property.
Applying for a 100% – 110% home loan
If you’re interested in finding out more about how to go about applying for this type of home loan from any of the Banks in SA, please complete this SHORT FORM. A home loan consultant will contact your immediately to offer some advice and assistance.