Home loans: Stricter requirements

2015-06-17 06:00


Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories


I recently applied for a home loan and had to supply three months’ salary slips. Why is that?


WHEN you apply for a home loan, the first step is a credit application with a bank or credit provider.

This application process is tightly regulated by the Natio-nal Credit Act and requires an assortment of information to be provided in order to allow the credit provider the opportunity to evaluate your credit profile and conduct an affordability assessment – in short, establish whether you are in a position to afford the loan and manage all of your personal debt obligations.

From the credit provider’s perspective, they also need to satisfy themselves that they are prepared to risk financing your home loan and that you will be able to pay your monthly instalments on time and for the duration of the loan.

The credit provider’s assessment of your credit profile will therefore dictate whether it will afford you a home loan or not.

However, the recent National Credit Regulations and affordability assessment criteria which came into effect on 13 March this year imposes stricter requirements on credit provi-ders regarding the information required for conducting affordability assessments.

Among others three months’ payslips or three months’ financial statements are now required to show salary deposits or other sources of income.

Not only does it increase the obligation on the consumer to provide proof of its income, but it also helps standardise the information required for an affordability assessment across all credit providers.

As a consumer, one should therefore get used to this type of information being required – and be ready to provide the necessary.

Be prepared as well that your credit history – your repayment history on a credit card, vehicle loan, cell phone contract et cetera – can also play a role when a home loan application is being considered.

Therefore, get the right documents ready and be financially responsible so you can show in your credit application and credit history that you can afford the repayments and have a record of managing your debt responsibly.

S Stacey Bartlett, associate, Phatshoane Henney Attorneys

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Financial advisors – Do you need one and should you get one?

The good, the bad, and everything else you need to know when considering hiring a financial advisor.


Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.