Tips for Improving Your Chances of Getting Bond Approval in South Africa

By: Kasper Brits – Brits Law Inc.

Published Monday, 30 January 2024.


Securing a bond is a critical step in making your dream home a reality. However, navigating the bond approval process can be daunting, especially if you’re unfamiliar with the intricacies of the system. At Brits Law, we specialise in real estate law and conveyancing services, and we understand the importance of securing a bond for our clients. In this article, we’ll discuss several tips to help improve your chances of getting bond approval in South Africa.

1. Maintain a Good Credit Record:

2. One of the first things lenders consider when evaluating your bond application is your credit history. A good credit record demonstrates to lenders that you’re a responsible borrower who is likely to repay the loan on time. To improve your credit record:

  • Pay your bills on time. Many people are unaware of the fact that even making a rental payment late by two days through a real estate agent will result in that agency flagging your late payment on your credit record. The same counts for most other monthly recurring payments that you may make.
  • Keep your credit card balances low.
  • Checking your credit profile too regularly actually influences your credit record negatively.
  • Applying for credit too often influences your credit record negatively.
  • Maintain a balance between assets and liabilities on your monthly expenses and make sure your bank is aware of all your large asset payments.
  • Have at least some sort of monthly account which you pay by debit order. If you have no debt, you will not necessarily have the best credit score. Having a simple cell phone bill that is paid on time will be better than someone who has no rolling debit orders on their bank account in some cases. The banks need to see how you cope with credit and if there is no history of credit, they would not be able to assess your risk to them.

3.Use a Bond Originator: Bond originators act as intermediaries between you and the banks, helping you find the best bond deal for your needs. They have relationships with multiple lenders and can negotiate on your behalf to secure competitive interest rates and favourable terms. Here’s how bond originators can assist you:

  • They streamline the application process, saving you time and effort.
  • They have access to a wide range of bond products, increasing your chances of approval.
  • They provide expert advice and guidance throughout the entire process.

4. Consider Co-Signing with a Spouse: If you’re having trouble qualifying for a bond on your own, consider asking your spouse or partner to co-sign the application with you. Co-signing essentially means that both parties are equally responsible for repaying the loan. Here’s how cosigning can benefit you:

  • Combining both incomes can increase your overall affordability.
  • If one applicant has a stronger credit profile than the other, it can help offset any weaknesses in the application.
  • It demonstrates to lenders that there’s added security in the form of joint responsibility.

5. Save for a Larger Deposit: A larger deposit not only reduces the amount you need to borrow but also demonstrates to lenders that you’re financially disciplined and committed to the purchase. Here’s why a larger deposit can work in your favour:

  • It reduces the lender’s risk, making you a more attractive borrower.
  • It may improve your loan-to-value ratio (LTV), which can result in better interest rates and lower monthly repayments.
  • It gives you more negotiating power when discussing terms with the bank.

6. Seek Pre-Approval Before House-Hunting: Getting pre-approved for a bond gives you a clear understanding of how much you can afford to borrow, which can help you narrow down your property search and make competitive offers. Here are the benefits of seeking pre-approval:

  • It shows sellers that you’re a serious buyer with the financial means to purchase their property.
  • It speeds up the buying process since much of the paperwork has already been completed.
  • It gives you peace of mind knowing that your financing is in place when you find the perfect home.

7. Don’t apply for other finance at another institution while you are waiting for your final bond approval:

  • We see many people make the mistake of applying for car finance after they have applied for a home loan. The inevitable result of this is usually that the bond application will be declined.

In conclusion, securing bond approval in South Africa requires careful planning and preparation. By maintaining a good credit record, using a bond originator, considering co-signing with a spouse, saving for a larger deposit, and seeking pre-approval before house-hunting, you can significantly improve your chances of success. At Brits Law, we’re dedicated to helping our clients navigate the complexities of the real estate market. Contact us today to learn more about our conveyancing services and how we can assist you in achieving your homeownership goals.