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This is what your bank does in the week you wait for bond approval

Waiting for a response on phone.resize

First time home buyers and owners who are eager to sell often wait in anticipation to get feedback from the bank on the status of a home loan application.

Stanley Mabulu, channel management head at FNB Home Loans, says the amount of time it takes for a home loan application to be approved often depends on several factors impacting both the bank and customers.

“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 at least two to four weeks at most,” adds Mabulu.

He unpacks the time it normally takes a bank to grant a 100% home loan to a customer with a good credit profile, provided there are no interruptions:

Day one: The applicant provides the bank with their personal details, three months’ bank statement, property description, proof of identification, address and income, as well as a signed offer to purchase. The bank confirms receipt of the information and validate if all the documents submitted are in order.

Day two: The bank will access the application taking into account the location, market value of the property, deposit, as well as the affordability and credit score of the customer.


Here’s what the different credit scores mean


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 has been successful the bank then prepares a formal contract or quote detailing the terms and conditions of the home loan, as well as the interest rate to be charged.

Top tip: Before applying for a home loan, first understand how a credit profile works and whether you are in good standing. You can also achieve this by requesting a pre-approval from your bank to determine how much you qualify for.

“When applying for a home loan it is important to ensure that you have provided the bank with all the information required. A majority of delays often result from the bank having to contact customers to get accurate or missing information,” adds Mabulu.

If you require clarity about the home loan application process contact your bank for assistance.

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1 COMMENT
  • lance 18th June 2018

    ‘Day’ one to five listed here are actually STEPS one to five and could easily be done in TWO days not five.
    In some countries it takes just a day for approval and a week to transfer a property while in S.A it can take 3 to 6 months.

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