“Most delays are a result of the bank having to contact customers to get accurate or missing information.”
The time it takes for a home loan application to be approved often depends on several factors affecting both the bank and customers, says Stanley Mabulu, channel management head at FNB Home Loans.
“Ideally, it should take a minimum of one week to get complete approval. However, due to application backlogs, delays or customers not meeting certain requirements, the process can be delayed for two to four weeks.”
Mabulu says when applying for a home loan, buyers should ensure they have provided the bank with all the information required. “Most delays are a result of the bank having to contact customers to get accurate or missing information.” This is what happens when a customer with a good credit profile applies for a 100% home loan:
● Day One: The applicant gives the bank their personal details, three months of bank statements, a description of the property, proof of ID, address and income, and a signed offer to purchase. The bank confirms receipt of the information and checks that the documents are in order.
● Day Two: The bank looks at the application, taking into account the location, market value of the property, any deposit, and the affordability and credit score of the customer.
● Day Three: The customer is contacted and informed of the bank’s decision to approve the application in principle. This condition is subject to the bank assessing the property to ensure it is in good condition, and that the sale price aligns to its market value.
● Day Four: The bank assigns an assessor to evaluate the property being purchased.
● Day Five: If the evaluation is successful, the bank prepares a formal contract or quote, detailing the terms and conditions of the loan and the interest rate to be charged. Before applying for a home loan, it is essential that you first understand how a credit profile works and whether you are in good standing. You can achieve this by requesting a pre-approval from your bank to determine how much you qualify for. says Mabulu.
For more information, contact your bank.