By Oluthando Keteyi - 15 January 2019Views : 2764
Individuals who cannot afford a home loan on their own should consider co-applying with a partner or family members to increase their chances of qualifying for a bond.
Mpho Ramatong, FNB Home Finance Division Channel Head for Housing Schemes, says lenders do offer consumers an opportunity to apply for a bond with two or more parties. These individuals would co-own the property and share the responsibility to honour monthly home loan instalments.
When evaluating joint bond applications, banks adhere to normal credit and affordability assessment criteria. However, the difference is that the profiles of all the co-applicants, as well as their combined income, is taken into account.
Ramatong shares a few tips for individuals considering to co-apply:
“Furthermore, the monthly home loan installment has to be debited from one account. Therefore, an agreement will have to be reached on whose account the funds should come from. This particular account should always have funds available on the installment date,” advises Ramatong.
For example, if you are purchasing a family home, and one member decides to pull out of the bond agreement, a new bond application will have to be processed and a full credit assessment conducted on the application to verify affordability.
Although this is a standard requirement for some banks, it may not be a condition for other lenders. Therefore, the onus is on the applicants to ensure there is cover in place.
“Before taking this important step, it is advisable for all potential co-applicants to seek advice from their bank or an expert to ensure that they are adequately prepared for this commitment,” concludes Ramatong.