Here's why serious buyers should get pre-qualified

In today's real estate market, securing your dream home requires more than just a strong desire; it demands a strategic approach, says Gerhard Kotzé, CEO of the RealNet property group.

"For example, home sellers are well aware that rising interest rates have created affordability issues for many potential buyers and are becoming reluctant to accept offers from those who don't already have finance in place, or at least a very good chance of obtaining a home loan.

"In many cases now, sellers need to achieve a quick sale to relieve pressure on their own finances and can't afford to have transactions fall through due to buyers being unable to qualify for a loan, and then start marketing their homes all over again."

However, there is an easy way for serious homebuyers to overcome this problem, he says, and that is to get pre-qualified for a bond through a reputable bond originator such as BetterBond.

"Pre-qualification not only simplifies the home buying process in several ways, but also enhances your negotiating power, and is really not difficult or costly to do."

For a prospective homebuyer, the advantages of pre-qualification are the following:

- It will give you a clear picture of your financial capacity and buying power. You'll know how much you can afford, so you can save time and effort by focusing on properties within your budget.

- It will give you more confidence and leverage in home price negotiations. Most sellers will prioritise buyers who have already been pre-qualified for a bond because this demonstrates to them that you are a serious and financially prepared buyer.

- Quicker occupation. Pre-qualification streamlines the home buying process by reducing the time it takes to go through the actual bond application process, take transfer of the property and move in.

What is more, says Kotzé, obtaining pre-qualification is an easy process if you apply through Betterbond, fill out the application form accurately and provide all requested financial documents, such as recent pay slips, bank statements and tax returns.

"You can also expect your credit record to be checked to see that you have a good repayment history and no debt judgments against you, and you may also need to provide details of your fixed monthly expenses and existing debt obligations to help determine how much disposable income you have and thus the bond amount you are eligible for.

"Then once your application is approved, you will receive a pre-qualification letter stating this amount, so you can confidently begin your house search in the knowledge that property professionals and home sellers will take you seriously."

And when it comes to applying for a loan, he says, the process will be quicker as most of the information that the banks usually request will already be on hand. This will enable an originator like BetterBond to quickly send your application to multiple banks and obtain a loan offer for you at the best possible interest rate.

"For example, if your pre-qualification already showed that your credit score is good and that you have sufficient disposable income to afford the home you are buying, you should qualify for a rate significantly lower than the prime rate - especially if you are also able to pay a deposit.

"This would not only make your monthly bond repayments more affordable, but also save you many thousands of Rands worth of interest over the lifespan of than loan."