Avoiding Homeloan Declines

Staff Writer @ BetterBond

Whether you’re a first-time buyer or you’ve been through the process before, waiting to see if your bond application will be approved can be one of the most stressful aspects of buying a new home.But now, in a smart move that is bound to please banks and estate agents as well as prospective home buyers, mortgage originator, BetterBond and credit rehabilitation company, LUCID Clear Credit, have teamed up to offer a free service that will remove much of this anxiety.

“What we are now able to do is provide prospective buyers with valuable information about their credit status and probable ability to qualify for a home loan before they even start looking for a property, or think about making an offer to purchase and applying for a bond,” says BetterBond CEO, Rudi Botha.

He says in addition, those making use of the service will be able to access expert and professional advice about how to repair damaged credit records and how to improve their credit score, which is a key element in bank decisions about home loan approvals, deposit requirements and interest rate charges.

LUCID MD Adv Kate Thambiran says they will be providing BetterBond clients with their Prevet Service, which includes a free evaluation and copy of the client’s credit report and consultation about his or her credit status with a LUCID credit counsellor.

“This will be done obviously with the client’s consent before BetterBond begins processing an application for home loan finance, and preferably even before the prospective borrower has made an offer to purchase.”

The service, she notes, enables would-be home buyers to establish whether they are likely to be turned down for a home loan because of any black marks on their credit reports, and whether their disposable income is enough for the amount of the home loan they are considering.

She says all too many consumers are blacklisted unfairly and without their knowledge, and often they only learn of this when they apply for finance such as a home loan. This can be prevented with the Prevet Service.

In addition, LUCID is able to assist BetterBond clients with further advice and other affordable services to rehabilitate their credit records to the point where they can qualify for a home loan, she says.

These include ScoreFix to assist those whose don’t actually have a credit score yet, such as newly graduated professionals; AccountFix where they negotiate lower settlements and payment arrangements with your creditors for any unpaid debt and ITCFix to clear any incorrect negative information from a credit report, she says. Ninety percent of all their clients who have taken up ITCFix have had their credit reports cleared, says Thambiran.

“We can also provide legal services to rescind judgments anywhere in South Africa. Again, many people are unaware even if they pay off a debt that a judgment for that debt will remain on their credit report for a number of years unless it’s rescinded. Once you have rescinded your judgment it also does not automatically fall off your credit report, which is where ITCFix helps you get a clear credit report. This can add between 30 and 40 points to your credit score and make all the difference when you apply for a home loan.”

Botha says advance financial preparation is becoming increasingly necessary for those intending to apply for a home loan not only because many South Africans have experienced some kind of credit problem in recent years but because lenders continue to apply extremely strict credit criteria and automated scoring or evaluation systems when considering home loan applications.

However, Botha says, most consumers have little idea of how to get a credit report, how to evaluate it and how to go about repairing any damage, which is the rationale for their joint initiative with LUCID.

“This will, we believe, enable many more South Africans to take charge of their financial future, to give themselves a higher likelihood of success when they apply for home loan finance and ultimately, to become homeowners.”