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How to get a home loan if your bank declined your application

ooba is successful in securing home loan financing for one in every three applications that are initially turned down by a bank.

My home loan was denied

Article summary

  • Bond applicants do not get preferential treatment by going direct, as banks are governed by the National Credit Act and lending is regulated.
  • Statistics show that you have a far better chance of obtaining the thumbs up on your home loan application if you go through a bond originator.
  • ooba, South Africa’s largest home loan comparison service, is successful in securing home loan financing for one in every three applications that are initially turned down by a bank.

When the time comes to apply for a home loan, you’d think that your first stop should be applying to your own bank directly. After all, you’ve been a loyal customer for years.

In reality, the notion that you will get preferential treatment by going direct to your own bank is a myth, as banks are governed by the National Credit Act and lending is regulated. But there is a bright light at the end of the tunnel for prospective homeowners who have been turned down by their own bank. Statistics show that you have a far better chance of obtaining the thumbs up on your home loan application if you go through a bond originator, who applies to multiple banks on your behalf.

“ooba is successful in securing home loan financing for one in every three applications that are initially turned down by a bank,” says Kay Geldenhuys, Head of Sales Fulfillment at ooba, South Africa’s largest home loan comparison service.

My home loan was denied, what do I do now?

“A homebuyer whose application for home loan finance has been declined by a bank due to a poor credit score should obtain a copy of their credit report from a credit bureau,” advises Geldenhuys. “Should the homebuyer identify errors on the credit report, the credit bureau should be notified of these and the homebuyer should take the necessary action to rectify the information displayed on the report. This will entail engaging with the credit provider who has provided the credit bureau with incorrect data.”

She warns against continuing to apply for credit, apart from home finance, after your home loan application has been declined due to a negative credit score (because your credit report shows that you have not been managing the repayment of your existing debt responsibly) as this could worsen your credit score. “Every credit application that you make requires the credit provider to check your credit report, and this is then indicated on your credit record. If you apply for credit when you have a good credit score, multiple credit applications will seldom negatively impact your credit score. However, if your credit score is poor, multiple credit applications can negatively impact this even more.”

Apart from using the services of a bond originator, Geldenhuys advises that once a prospective homebuyer has obtained their credit report from a credit bureau and confirmed its accuracy, they should check that their debt repayment history and overall credit score is satisfactory.

“Then use ooba’s Bond Indicator,” she suggests. “Within five easy steps and no more than a few minutes, this free bond affordability tool will access your credit profile, assess your income and expenses, and give you a summary of your affordability and a realistic indication of your price ceiling.”

Armed with the knowledge that your credit score is sound and that you can afford the monthly bond repayment instalments, and with a bond originator guiding you through the process every step of the way, the chances are very good that you’ll be awarded your home loan without any difficulty at all.

South Africa’s leading home loan comparison service offers a range of home loan calculators to help people looking to buy a home determine what they can afford. Click here to access ooba’s free, online prequalification tool, the ooba Bond Indicator. Then, when you’re ready, you can get prequalified or apply for a home loan with ooba.

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