Reasons for decline of bond application

Affordability

The applicant will not be able to afford the monthly loan repayment. Property prices are rising rapidly, more than the income of most borrowers and may place the required bond payment out of the purchaser’s financial reach. The applicant might require a 100% loan due to the fact that he/ she can’t pay a deposit for the transfer and registration cost. The size of the loan could also push the monthly payments beyond financial reach. Banks take two factors into account in determining its risk. They look at the individual’s financial recourses and ability to pay the debt, and use a behavioural scoring model. This takes into account current income, employment history, consumer payment history with all major retailers and then the performance with the bank itself, if he/she is an existing client of the bank. They carry out credit checks and look to see whether a judgement has been made against the potential borrower as result of a default in payment and any debt in the past.

The bank assesses the potential erer’s payment history across recorded transactions, including purchase of motor vehicles, clothing, furniture and professional services. Any skipped payment or bad debts incurred will count against the applicant. They assess the property to evaluate the strength of the investment and its ability to realize value if the property should be sold for any reason.

If the bank of your choice declined your application or conditions offered were onerous, we would negotiate with another bank

Grant

If an applicant obtains a satisfactory score, good credit record, the bank makes a physical assessment of the property to be purchased, taking into account its condition, security and location, as well as the demand for homes in that area. If the property meets all these criteria, the chances are that the bank will grant the loan.

If a Home Loan Application is denied, reasons will be provided for the decline.