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.

 

 

 

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