To make sure of how much you can qualify for when applying for a home loan is to go through the home loan prequalification process. This is the first in formally applying for a home loan.
A prequalification is not a binding document and in many cases it is just a verbal estimate. It is an estimate of how much you can borrow based on your income.
A prequalification is not a loan guarantee and it is only as accurate as the information you have provided. Don’t try to overstate your income in the hope of qualifying for a bigger loan.
The lender won’t pull you credit record or commit themselves to what you can basically call a home loan quote. This is just a ball park figure to give you an idea of how much you can borrow.
If you’re serious on making an offer on a home you must complete a full application and the bank or your mortgage broker will need documents like payslips and bank statements during which time they will also confirm your employment and pull your credit record.
If everything is in order the bank will issue and AIP (approval in principle) which means that they are committed to give you a home loan as long as your credit or employment do not change for the worse.
Next, the lender will do a valuation on the home you would like to purchase and if they can find sufficient value in the property they will issue a final grant which means that your home loan is approved. The lender will instruct the attorneys to start with transferring and registering the property in your name.
This process will take about two weeks and once you and the seller have signed the transfer papers it will take about another two weeks before the property is registered in your name.
For more information about home loans, visit: http://www.gpfmortgage.co.za/contactus.html