 Good day to our viewers at home. Welcome to our show where we unpack the pre-approval tools with net bank home loans I am Olindwando, head affordable housing at net bank home loans So how potential buyers navigate their home buying journey banks have created a series of pre-approval tools that assist them to shop confidently knowing exactly how much they qualify for Getting pre-approved is such a critical step in the home buying journey as not only does it help you shop confidently But it can save you money as well. You are probably asking yourself What is a pre-approval tool? Well, a pre-approval tool is a check that a Financial institution would run on you as a potential buyer to check if you're actually good for the money that you want to apply for This is actually quite good because it saves your time, but also it saves you money as well Traditionally pre-approval tools would look at something like a credit check as well as an affordability test You know banks have come a long way back in the days people used to use a 30% rule where people would typically say If I entered that 10,000 rents per month, I can buy a house where my monthly repayments would be about 3,000 rents a month. Well, things have changed. There's been a lot of innovation and sophistication So that's no longer an optimal way of knowing how much you qualify for Hence, I'm talking to you today about the various pre-approval tools that you can use in the market As you know, our circumstances are unique and different. We don't have a one-size-fit all So it's important that you go through these particular tools and get a sense of how much it is that you as a unique individual Would qualify for So you're probably wondering why is it important for you to get pre-approved I'm going to take you just through three critical reasons why it's important for you to get pre-approved One, you can obviously shop more confidently knowing exactly how much it is that you qualify for That way you are able to view properties within your price range and also look for properties in areas where the price range Agrees with the amount that you've been pre-approved for Two, it also really does mean that you've got a budget that you are working with Typically, when you're hunting for a house of your dreams You find yourself moving the bar higher and higher as you realize better-looking properties However, a pre-approval helps you to stay within your budgets The third one for me, which is the most important one is that really a pre-approval Gives you a competitive advantage Potential sellers in the markets are looking for buyers that would not waste them time Buyers who stand a huge chance of being approved by the bank should they seek a mortgage So if you've been pre-approved already, the seller gets the indication that you are good for the money that they're asking for Therefore, you will not be a time waster if you are not a time waster You are in a position to negotiate better terms of business as well as a better amount for yourself As a customer Now that I've convinced you about the importance of getting pre-approved I will now let you in on a couple of tips about what a typical pre-approval tool would look at One is the credit check We've already spoken about how banks would conduct a credit profile check on you as a potential buyer to get an indication of whether you are someone that they're comfortable to lend money to So the credit check on a pre-approval tool is actually linked to real life credit bureau information Therefore, it goes into your profile and check how you have conducted your affairs Wherever you have taken debt So it's quite important for you as a potential home buyer to make sure that Whenever you've taken debt you honor those debt commitments and you pay you repay the money on the terms agreed with Whoever the lender is all of this information goes into what we call a credit score Which banks then use to determine whether you are likely to repay the money that has been lent it to you a Second one is an affordability check an affordability check looks at your income in Relation to the debt commitments that you already have as well as your existing living expenses Taking into account the repayments you need to make on the money that you are seeking financing for So we've had this question where people would say do I earn enough to qualify for a home loan? Well as institutions, we would say You need to earn enough for you to be able to afford the repayments on this particular Paychase you are about to make taking into consideration what you are already paying for It's not a matter of not earning enough But it's a matter of whether your income and the particular property you want to buy is Supported by your current circumstances This also helps you as a potential buyer to know exactly what is within your reach and what's Realistically doable for you a third one, which I think is really quite good for customers It's the fact that a typical pre-approval tool will give you a breakdown of all the costs that are involved When you purchase a house, we know that buying a property is a process that involves a lot of upfront costs So it's good that you know exactly what those costs look like before you start buying that way You can make an informed decision I'll quickly give you a breakdown of what those costs will look like one of them would of course be the Initiation fees that bank would charge to administer the home loan for you The second one being the attorney costs that are paid by you to get the property Transferred from the seller's name into your name The third one would be the bond registration cost that you pay to the attorneys to register a bond in your name as a buyer You also may be forced to pay an estate duty That's a tax that you pay if your particular property costs More than one million rents currently in South Africa It's important for you to understand these costs as you need to make room to pay for them upfront But most importantly the tool might also give you an indication if you are required to pay a deposit For your particular purchase Remember paying a deposit if you can is always recommended as it boosts your profile as a buyer But it can also reduce the interest rates that the bank charges you I am really excited about this one Our soon to be launched USSD based pre-approval tool This is innovative, first in the market, easy to use Now we're all familiar with the USSD functionality We've been using it for a long time You just dial star, 120 star, hash, whatever the rest of the string is This is a pre-approval in your fingertip, as easy as buying airtime For you as a future buyer, this is convenient You don't need to buy data, you don't need to install an app and you get a quick response I hope you have enjoyed our conversation today I certainly did Remember, if you want to know more information about how you can get pre-approved with NetBank You can go to our website www.netbank.co.za forward slash home loans You will see our pre-approval there and you can be able to go shop more confidently You can also download our money app Remember, it has really cool tools about the property reports that we spoke about But you can also send us an email, homefinance at netbank.co.za More importantly, don't forget to look out for our upcoming USSD pre-approval tool It really is innovative Thank you so much from me, Colleen Duandwe Happy house hunting and good luck