Once you have been pre-approved for a home loan through an originator like SKG Home Loans, you should avoid making any significant changes to your financial situation until you have bought your new home and your home loan has been activated. It would seem obvious, for example, that you need to keep paying your bills in the time between home loan pre-approval and the transfer of your new home, but it’s easy to forget things or pay late in the excitement of house hunting. In addition, you should make sure you do not go into overdraft on any of your accounts, and that any debit order payments are left as they are.
The reason is that your pre-approval is a “snapshot” of your financial situation at a time, and you need to stay as close to that picture as possible until your home loan is granted. Therefore, you should also not apply for any new credit during this period. Mortgage lenders are bound to do a second credit check before a final loan approval, and if you have opened a new account, this will have to be verified, which could delay your approval. Your credit score could also change because of the new account and that might mean an adjustment to the interest rate you will be charged on your home loan. What is more, if you have bought something major on credit, lender will have to factor the repayments into your debt-to-income ratio to reassess the affordability* of your home loan in terms of the National Credit Act – and that could result in you not getting the loan at all. You should also be careful about paying cash for large purchases at this time, or even paying off a debt like a credit card balance, as that could result in you having lower reserves to cover a deposit or the transfer costs, and once again change the lender’s assessment of your financial situation when it comes to granting the loan. If you decide to change jobs after you received pre-approval, lenders will ask for a new employment contract and a dummy payslip when they assess your actual loan application, in addition to payslips from your old job.
And finally, although adding to your assets should not be a problem, you should keep records of any unusual deposits into your bank account at this time. If you receive a bonus or a gift of cash, for example, or sell some shares or other assets, you must be able to prove where the money came from. In short, every move you make with your money will have some sort of impact, so you should consult your bond originator and the lender that gave you the pre-approval before you do anything.