Frequently Asked Questions

These are the general guidelines of the requirements to qualify for a mortgage loan. However, remember that each case is evaluated individually by the bank or lending institution.

• You should have funds to cover the down payment and the closing costs. These funds usually proceed from your account. You should be able to demonstrate their source with bank statements.
• If you are self-employed, or a business owner, you must your tax returns (Self Assessment tax return¬SA100) and / or a financial statements from the last 24 months and financial statements.
• You must have a source of income or collect the amount that will allow you to pay the loan you applied for. The income you report can be your own or combined between you and your spouse or a cosigner.
   

To speed the mortgage loan application process, you must provide the following documents during the interview:

• Last two employment payment stubs
• Bank statements (2-months)
• Property Legal Description
• Property Cadastre Number
• Purchase and Sale Agreement (if applicable)

A loan prequalification is an estimate of your borrowing power. Your prequalification will work as a guide to help you find a residence. Finally, the approval is based on this information and in your credit report.

There are four basic categories of charges during the closing of the mortgage loan:

Charges related to the transfer of the deed:

• Title Insurance
• Legal Fees

Fees (Government Recording and Transfer Charges):

• Fees paid by the borrower or by the seller, depending on specified terms and conditions.

Charges related to the cost of the loan:

• Origination Fees
• Discount Points
• Loan Insurance Premium
• Homeowner¹s Insurance Premium
• Property Taxes Escrow Account, if applicable

Other expenses:

• Property Appraisal
• Credit Report
• Title Search
• Flood Zone Determination
   

It is important that you provide this document to the bank or financial institution that lends you the mortgage before the expiration date. You can bring it to a Customer Service Department or to any branch.  This payment is part of your monthly mortgage payment and it is the bank’s responsibility to submit it.

Advice: To maintain a record on CRIM provide an additional copy and request for it to be signed. 
 

You can apply for a prequalification form from a bank by phone, in person or online. This process will demonstrate your borrowing power and the amount that you can afford.

Advice: If you are planning to purchase a property, you should set up a savings account to afford the closing costs. 

 

Mortgage loan interests for primary and secondary residences, home equity loans and second mortgages are tax deductible.

Advice: If you need fast cash at a lower interest rate than a personal loan, use the equity in your home to your advantage! 


 

A mortgage loan allows you to purchase a property and a personal home equity is a loan with lower interest than a personal loan, guaranteed by the property you already bought.

Advice: Before acquiring an additional loan for unexpected expenses, find out if you qualify to refinance your current mortgage loan. 



 

Personal Home Equity Loans offer lower interest rates than a personal loan.
The interest is tax deductible and is available within 24 to 48 hours.

Advice: Evaluate all the loans and credit cards that you have with high interests. Consider getting a personal Home Equity Loan to consolidate debts and have a monthly and lower single payment.

The best alternative is to refinance your current mortgage. There are mortgages with low interest rates payable in 10, 15, 20, 25 and 30 years. Compare interest rates published in print media. You can also call the lending bank of your choice to receive the proper orientation.

Advice: Keep in mind that when you refinance a property, closing costs will be included in the total amount of the loan.

 

Start by gathering information from friends or coworkers, read the newspapers, visit the area and make a list of all the houses available for sale. There are many magazines and specialized guides in real estate that can be very useful. You may also contact a Real Estate Broker in order to receive assistance and make the best choice in a particular area.

Advice: The Real Estate Broker will not only show you options within your budget, but he or she can also assist you with the financing. 


 

Make a list of your needs. Make a list of the features you like and dislike of each house you preview. Don't be afraid to ask questions about the neighborhood, restrictions and regulations of the homeowners association or related to historic sites. Find out the location of the nearest shopping centers, schools and hospitals. Check the structural and land development details of the property.

Advice: If you like the property and it fulfill most of your requirements, contact an engineer to help you identify any structural defects.