Remember that saying, ‘Home is where the heart is’? Well I believe in it! A home is much more than just a building with rooms, doors and walls. It is a place where you go to seek solace, work or study, play, to be creative, love and create memories. So buying your home is one of the most important purchases that you will ever make. When you have decided that you want to settle in a new location and start a new life for yourself and your family, there are many decisions to be made; such as the area you wish to live in, the amount of rooms you need and other considerations such as an entertainment area and so forth. But besides the decisions you need to make about the property there are also the financial implications of your choice.
The first logical piece of information you need to know, is how much you can afford and how much of a home loan you can qualify for based on your financial ability to repay that loan. Buying a home is probably one of the biggest purchases you will ever make, and with the exception of the very rich many of us do not the kind of cash on hand needed to purchase a home. This is where home loans from financial institutions come in. A home loan is money being borrowed from the bank with the promise made of repaying that loan over a period of time with the addition of interest. Your monthly repayments depend on the type of home loan, interest rates and other factors.
When taking out a home loan, there is a process that the bank goes through to see if you financially eligible for a home loan, whether you would be able to pay back the money you had borrowed. Each bank has its list of requirements which might differ slightly, although here is a list of documentation that you require for your initial application.
The following documentation are required by financial institutions to process your loan application.
Personal details:
• Certified copy of identification document
• Copy of proof of payment
• 3 months bank statements
• Your income tax number
• Proof of physical address
• Offer to purchase (signed by all parties)
Additional information for Business Owners, Practising Professional or Partnerships:
• 2 years financial statement signed by client
• 6 months Business and Personal bank statements
• Legal docs- CK1 for Closing Corporations and Founding Statements for PTY LTD
Additional documentation for Companies or Incorporated Companies:
• Latest audited financial statements
• Latest certified financial statements
• Bank statements for last 3 months
This is a list of documentation that the financial institution will need you to supply when you are putting in your application for a home loan. And with this information they will be able to determine whether you qualify for a home loan or not. Another point to remember is that most financial institutions now work with automated credit scoring systems, these are essentially credit analyses computer software. Sometimes the software could have problems reading your credit history, in which case someone will call personally to ask you some questions for verification- however this is only for clarification, so don’t be alarmed! Getting pre-approved before you go house hunting ensures that you know exactly what price range of homes you can look at. May your new home be filled with happy memories!
Author Resource:
Danny Aaron manages the website http://www.isureins.co.za , a site devoted to providing you with the best information about home loan
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