Once you have been pre-approved for a home loan through a mortgage originator like De Mink Property Finance, you should avoid making any significant changes to your financial situation until you have bought your new home and your home loan account has been activiated.
Pay your bills!
It would seem obvious, for example, that you need to keep paying your bills in the time between home loan pre-approval and the transfer of your new home into your name, but it is easy to forget things or pay late in the excitement of house-hunting.
You should also make sure you don’t go into overdraft on any of your accounts, and that any debit order payments are left as they are. The reason is that your pre-approval is a “snapshot” of your financial situation at a particular time, and you need to stay as close to that picture as possible until your home loan is granted.
Don’t go into any other debt…
This is also why you should not apply for any new credit during this period. Mortgage lenders (i.e. the banks) are bound to do a second credit check before final loan approval and if you have opened a new account this will have to be verified, which could delay your approval. Your credit score could also change because of the new account which might mean an adjustment to the interest rate you will be charged on your home loan.
What is more, if you have purchased something major on credit, the lender will have to factor the repayments into your debt-to-income ratio to reassess your affordability for the home loan in terms of the National Credit Act …. and that could result in you not getting the loan at all!
You should also be careful about paying cash for large purchases at this time, or even paying off a debt like a credit card balance, as that could result in you having lower reserves to cover a deposit or the transfer costs, which will once again change the lender’s assessment of your financial situation when it comes to granting the loan.
Avoid changing jobs, if possible.
If you decide to change jobs after you have been pre-approved for a home loan, when lenders assess your actual loan application they will ask for a new employment contract and a dummy payslip as well as payslips from your old job.
Oh and, finally, although adding to your assets should not be a problem, you should keep records of any unusual deposits into your bank accounts at this time. If you receive a bonus or a gift of cash, for example, or sell some shares or other assets, you must be able to prove where the money came from.
In short, every move you make with your money will have some sort of impact, so you should consult the bond originator who gave you the pre-approval before you do anything.
Call LIZ or LINDA on 021-930 4479 or e-mail us at email@example.com if you are considering the purchase of a property and want to know the home loan amount you will be granted. There is absolutely no cost to you for our expert and professional assistance.