For many first-time buyers, the process of applying for a home loan can often be daunting as they wait eagerly for a positive response from their bank.
According to Martha Murorua, Consumer Executive Officer at FNB Namibia, taking time to understand how banks assess home loan applications can go a long way to help you increase the chances of getting approval.
She shares tips to help consumers get their home applications approved without any delays:
Check the valuation of the property – before a home loan is approved, banks conduct their own valuation to ensure that the amount being borrowed is not far off from the market value of the property. This protects the owner as well as the bank. FNB allows customers to proactively get a property and area report on the FNB App and compare this to the details provided by the seller or agent prior to the home loan application process.
Avoid taking on additional debt – many consumers mistakenly assume that banks only monitor their credit profiles and perform updated affordability checks prior to the home loan approval process. However, this process continues for at least three months until the property registration process ends. Therefore, taking on additional debt or defaulting against credit providers can result in the bank repricing and in extreme cases declining the loan altogether.
Saving up for a deposit – for first time buyers, banks occasionally grant 100 percent home loans and having a deposit demonstrates your ability to save and increases your chances of getting approval. A deposit is required when a second or third home is bought.
Get pre-approval – getting pre-approval ahead of your home loan application gives you peace of mind as you will know whether you qualify or not. Your bank will normally ask for your latest pay slip, six months’ bank statements, ID copy and proof of address for pre-approval.
“If you qualify financially and have met all the above requirements you are one step closer to getting approval and ultimately owning the house of your dreams. FNB Namibia is ready to assist you in fulfilling that dream of owning your own house,” Murorua said.