Usually, if you have a job for two years or more as a form of employment and income stability and a credit score that’s good enough. Paid down your debts and started saving then you could qualify for a mortgage.
A mortgage is a loan that’s secured on immovable property, normally your home; hence it’s also referred to as a home loan or bond. The mortgage is lent to you in a lump sum to pay for the property and is legally bound to the property by the attorneys who register your mortgage bond.
And it’s calculated by the lenders who takes the loan required (this is known as the principal sum). And then works out the interest you’ll owe them over the full term of the mortgage. And this interest is, in effect, an additional sum you now owe the lender.
Making it a total of two loans calculated by the annual cost of the interest multiplied by the term of the mortgage. And your instalments will change according to how the interest rate increases or decreases.
But getting the best mortgage rates isn’t just about your salary amount. As a more important consideration is an applicant’s debt-to-income ratio. To determine whether a homebuyer is able to afford their monthly mortgage payment by calculating how much income remains after debt payments are made.
This is calculated by taking your gross income, less all the deductions like tax, UIF to get your net income. Then work out what your total monthly expenses are like groceries, utility bills, car insurance. And add that to all your monthly commitments to any debts you have, credit cards, vehicle finance or loan repayments.
Subtract this amount from your net income and the amount you’re left with is your disposable income. This figure will be the maximum monthly mortgage repayment most lenders will allow.
Make extra repayments whenever you can as interest on a mortgage loan is calculated daily and then billed monthly. Because of this, if you make any additional payments into your home loan, you’ll reduce the outstanding balance and the interest that you pay.
Also the bigger your deposit, the better your chance of getting a lower interest rate and reducing the total interest charged on your bond. Helping you pay off your loan faster saving thousands of rands and years off the lifespan of your bond.
Also shop around for the best home loan deal to get the lowest interest rate possible from the outset.
