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Friedpet

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I'm finishing with my studies this year (in 2 weeks to be exact...):D

I have a guaranteed job for next year. What are the chances of getting a 100% home loan to buy a place in December already?:confused:
 
Very very slim, unless you have a huge deposit and a solid credit record. Otherwise you can forget about it. What's the rush though?
 
Don't have a deposit, and not so sure about my credit record.
I don't want to pay rent. Would rather invest in my own place.
 
You'd need a 3 month bank statement AFAIK, so you'd most likely only be able to after you've received your 3rd month's salary.
 
and transfer can take 2-3 months too. you need to spend a good few months looking for a place before that, get a sense for the market.
 
Well if its a high enough paying job and you're ready for 8k payments a month .. MIN!!!!!!!!!!!
 
Sydwayz said:
You'd need a 3 month bank statement AFAIK, so you'd most likely only be able to after you've received your 3rd month's salary.
Click to expand...

I'd hope they'll be satisfied with my employment contract only?

ElecEng said:
and transfer can take 2-3 months too. you need to spend a good few months looking for a place before that, get a sense for the market.
Click to expand...

This isn't good news...don't really have that long. I've been keeping an eye out on the market and spoke to a few agents in the area. There's a big demand for rentals so I won't have much trouble renting the place out when I move.

Vengeful said:
Well if its a high enough paying job and you're ready for 8k payments a month .. MIN!!!!!!!!!!!
Click to expand...

That won't be a problem.
 
Also take into consideration bond & transfer fees..
This alone can easily go R40K+ (depending on the price of the property)
 
I think it's better to waste money on rent and find a good place, rather than buy a place in a hurry. It's a 20year commitment and once you buy, you are stuck. I would take my time and look for the right place.

Your credit record is based on having Credit Cards or clothing accounts, and how well you pay them.If you don't have either, you will either get a crazy interest rate or they will reject you outright.
 
Friedpet said:
I'd hope they'll be satisfied with my employment contract only?
Click to expand...

Unfortunately not. Anyone can fake a contract.

Your credit record is a big factor. If you have never paid anything off, like store cards, credit cards, car, etc then they don't believe you would be able to pay it back and they won't give you much, let alone 100% bond.
 
I would say your chances are slim to anorexic unless you have an 80% bond. I'm afraid to say you will more than likely be renting.

Reason? You need 3 months of bank statements which show a salary deposit in order to qualify for any credit, and you will not get any home loan whatsoever without a credit rating. So, you need to wait 3 months after you start working to be able to get your first cellphone contract and/or credit card, and once you have those, you need to use them for probably minimum 12 months in order to build up a good enough credit rating. Only then will you be able to apply.

Plus, by then you will have been able to save up a decent deposit, and found a decent place.
 
Generally the banks would want proof of salary on your bank statement and I know that some require you to have worked at your employer for a certain period (shows job stability as well as steady stream of income). The bank statement is mostly used to determine your cashflows (income vs expenditure).

Secondly, the credit rating plays a rather big role in your application as well. If you don't have a credit rating, then it's rather difficult to assess what type of client you are. I know that with micro-lending / unsecured lending, your credit rating will play a factor in determining the term (and consequently the value) of the loan that you qualify for. The credit rating will also play a role in the interest rate that they offer you.

It won't hurt to go to the banks to find out if you qualify. Just do yourself a favour and go to a couple of banks and try to get the best deal possible. You mentioned that you won't have funds for a deposit and you're also looking for 100% coverage. Perhaps try Standard Bank as they have a product specifically aimed at first time home owners, which covers all costs (transfer costs, legal fees, deposit-free etc.). The only short term drawback is that the interest rate might be prime plus (you can fight and renegotiate after 18-24 months!).

Purchasing property via a bond is a big financial obligation, so take your time in deciding on whether to purchase now or later.

Maybe also read this article, which might bring things to light that you haven't thought of:
http://www.iol.co.za/business/personal-finance/should-i-buy-or-rent-1.1551522
 
I can confirm what the others have said here.

I had no credit record and was rejected by Nedbank as a credit risk. I had to pay prime plus 0.9% with a 5% deposit on my home loan issued by FNB in March 2011

I paid the deposit, applied twice to have my interest rate reduced (now paying 8.6%) and next year March 2014 the loan will be fully paid up.

Also, do not listen to agents...ever.
 
Hi, I am in the property business since 2004, buying and selling..

AFAIK, it won't cost you a penny to put your papers on the table and apply, ask them for documents needed.
Even if you don't go to the bank yourself, use a broker or an agent who will only charge you in case your application was successful.
Remember that when you signing an offer to purchase, it should just state that its subject to a bond approval. In case your application was declined, automatically the offer the purchase will be cancelled with no costs.
I agree with saturnz DO NOT LISTEN TO AGENTS EVER ! ..

So no hassle ;)
 
The other thing about renting is you can figure out what you want in a place and also get an idea of work traffic flow first. Once you start working you can ask around and find out where the good places to live are to help you get to work faster etc. Seriously, its not a bad idea to rent for a year or so and build up a nice big deposit while building your credit record. You will be tied to the bond for a while so I am guessing that the rate the banks will give will be a lot less after a year or two than what you could get now so you may not even loose as much as you think renting for a bit.
 
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