Question:
I was just wondering what is the procedure to apply for a home loan if I have a bad credit record?
Answer:
This week, our home loans expert from Bond Busters, Craig Chinnappen, answers our readers question.
If you have an impaired credit report, it does not necessarily mean that you will be declined financing when apply for a home loan.
You need to determine the degree of how impaired your credit report is.
I would suggest you visit My Trans-union and pull your credit report (you are able to access 1 free credit report a year, however, rather pay for one to get a more comprehensive report – the R80 report is adequate).
If there is legal action, judgements or defaults listed on your credit report, you will first need to remove this before the banks will lend to you.
The justice page on the government website is a good place to start.
If there are simply arrears on your accounts, but no legal action, you will need to catch up all the arrears on your accounts and maintain full and on time debt repayments for a period of at least three months before the banks will consider financing you.