Having a good credit record is essential if you need to secure a home loan…
Donald Trumpsâ?? multibillion dollar property portfolio might or might not be your sole ambition, but youâ??re independent, ambitious and looking forward to buying your own house.
How can you make sure things run smoothly once the Deed of Sale is signed and you need to submit your first bond application?
â??To have a healthy credit recordâ??, says Vivienne Cox from Multinet Mortgages, â??is essential when you want to apply for a home loan. Not paying your accounts on time can cost you your dream house. Even accounts paid a day or two later than youâ??re supposed to, will affect your credit scoringâ??.
Experians CreditExpert has the following tips on their website to help keep your credit record healthy:
• Pay your accounts on time every month
• Pay the full instalment owed each month
• If you are unable to make a payment due to unforeseen circumstances, talk to the company concerned and make alternative arrangements to pay back what you owe
• Never buy on credit without knowing if you can afford the repayments
• Try to keep credit repayments between 20% and 30% of your income. If you earn R5 000 per month, keep your credit obligations between R1 000 and R1 500 per month
• Stay informed about your personal credit information. Obtain a copy of your credit report at least once a year
• Never lie on an application for credit
• Never ignore a letter of demand for payment. Make a phone call or write a letter to explain your situation
• Never ignore a summons to court for non-payment. This could have a serious reflection on your credit report
If you know your credit record is sound, the rest of the bond application process will only be a formality, provided your disposable income is sufficient
â??Most banks credit criteria policies state that bond repayments should not exceed 30% of your gross income and you should be able to afford the repayment after all your expenses has been taken into account,â?? says Cox.
â??Making use of a bond originator to process your application is the easiest, as they have contracts with all the major banks, know how they assess applications and can help motivate important details of your application.â??
Be conscious of the importance of appropriate account conduct as you will surely need a good credit record the day you find your dream home.