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The most important home loan requirements for South Africans

There are a few things relevant to South Africans hoping for a positive outcome from their application for finance to procure their dream home.

Home Loan requirements

Article summary

  • You need a good credit record to apply for a home loan.
  • You need to be 18 years or older.
  • Certain documents are required to submit the application.

Are you on the brink of applying for a home loan? There are a few things relevant to South Africans hoping for a positive outcome from their application for finance to procure their dream home.

It goes without saying that you need a good track record when it comes to managing credit before a bank will consider granting you a home loan. You need to be able to show that you pay your debts in full and on time.

You need to be 18 years or older, permanently employed for six consecutive months or self-employed for the past two years.

In terms of the documentary requirements for the application itself, here’s our handy top 6 to guide you:

  1. Proof of income: you must supply your latest salary slip. Some institutions may ask for the last three salary advices, especially if you earn commission or overtime. If you are married in community of property (COP), your partner will have to supply the same.
  2. Make sure you have the last three months’ bank statements for your personal account as well as for your partner’s, if applicable.
  3. You need to provide a copy of your South African ID document (and your partner’s if applicable).
  4. You will need to supply the bank with a statement of your monthly income and expenses, which includes your monthly debt repayments and living expenses.
  5. The bank will ask for a personal assets and liabilities statement.
  6. Of course you’ll need to hand over a copy of the purchase agreement as well.

If you’re self-employed, it gets a little more complicated but don’t let this put you off. Again, if you are buying with a partner they will have to supply the requested documents, where relevant. Here’s our list of the top 6 things you’ll need to submit with your application:

  1. Proof of income: because you won’t have a salary slip you’ll need to request a “letter of drawings” from your accountant. The same goes for your partner if married COP.
  2. The bank will ask for your personal bank statements from the last six months. Ditto for your partner, if applicable.
  3. You must submit a personal assets and liabilities statement as well as your business account bank statements from the previous six months.
  4. You will also need to provide the last two years’ annual financial statements (AFS). Where these are dated more than six months prior to the date you are submitting the application (for example, if your AFS are issued in February and you are applying in September), current management accounts not older than two months signed by yourself and your partner, if applicable, and your accountant must be supplied too.
  5. Copies of your ID document (and your partner’s) will be required.
  6. You’ll also need a copy of the purchase agreement.

Of course, there’s no point to this amount of effort unless you know how much you might qualify for when you apply for the home loan. Take the first step by finding out how much you can afford. Use our Bond Indicator to see what you qualify for then, when you’re ready, get prequalified or apply for a home loan with South Africa’s largest bond originator ooba.

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