FREQUENTLY ASKED QUESTIONS

TABLE OF CONTENTS HOW CAN I MAKE SURE MY APPLICATION HAS THE BEST CHANCE OF APPROVAL?

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HOW CAN I ENSURE I HAVE A GOOD CREDIT SCORE?

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HOW CAN I REPAIR A BAD CREDIT RECORD?

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CAN I GET A HOME LOAN IF I’M BLACKLISTED?

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WHAT IF I’M UNDER DEBT REVIEW?

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WHAT ARE THE BENEFITS OF SWITCHING?

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HOW DOES DEBT CONSOLIDATION WORK?

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HOW DO YOU CALCULATE INTEREST RATES?

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ARE THERE ANY EXTRA OR “HIDDEN” COSTS I NEED TO PREPARE FOR?

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FREQUENTLY ASKED QUESTIONS HOW CAN I MAKE SURE MY APPLICATION HAS THE BEST CHANCE OF APPROVAL? • Ensure that you have all your documents in order and available, such as payslips, bank statements, up-to-date financials. (See HERE for what you’ll need to supply) • Ensure that you have worked out how much you can afford to purchase for. Your SA Home Loans consultant will assist you with this. • Take into account all the costs involved in home ownership, such as municipal rates and utilities, as well as Home Owners Cover insurance. Home loan providers will also take into account these expenses when looking at your affordability, not just the actual bond repayment. • The ability to put down a deposit will be viewed favourably by your home loan provider. • Ensure that you have the funds available to pay the transfer fees and bond costs. • When applying for a joint home loan with a spouse or partner, it is preferable to provide the income details for both applicants even if the home loan instalment will be paid for by only one of the applicants. This will give your home loan provider the ability to accurately work out your household affordability. • Ensure that you provide accurate and up-to-date information on your application form.

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HOW CAN I ENSURE I HAVE A GOOD CREDIT SCORE? Your credit score is derived from your credit profile. The credit bureaus summarise your profile into a credit score, which is a measure of your credit capacity. The higher your credit score, the lower the risk of lending to you. When you apply for a loan, lenders need to know you will repay your loans regularly and on time – so they first assess the risk of providing you with credit by looking at your previous payment behaviour. So it is necessary to have some credit facilities, such as a store account, credit card, car finance etc, in order to demonstrate good payment behaviour and build a credit score. • If you are used to paying for everything in cash, it would be a good idea to open some credit facilities in order to demonstrate good credit behaviour. • Make sure you pay your accounts on time, every time. Don’t skip payments – even if you pay double the next month, it will negatively affect your credit profile. • Don’t be tempted by easy credit. Avoid loan sharks and “pay day” loans. • Every credit check on your profile is noted and too many checks will reduce your score – so don’t apply for credit everywhere you go. • Make sure you fill out your credit applications carefully, so there are no errors on your profile. • If you think you may not be able to pay your loan or account, contact your credit provider to discuss repayment options. Don’t ignore the problem.

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HOW CAN I REPAIR A BAD CREDIT RECORD? Because you need a good credit profile to obtain finance, it’s important to check your credit profile and to address any negative issues before you apply for home finance. The good news is that a low credit score can be improved by following these steps: • Ensure that any arrear accounts are brought up to date, and that all defaulted accounts are settled in full. Contact each creditor, if need be, and try to arrange a suitable payment arrangement which would allow you to settle the accounts. • Ensure that all your remaining accounts are paid on time each month and avoid making new credit applications. • It is important to refrain from taking out quick, “pay day” loans as this will reflect on your credit profile and contribute to a lower rating. • Once you have done the above, wait for at least 3 to 6 months – maintaining your good payment behaviour – in order for your credit rating to improve before you apply for home finance. It can take some time, but if you persevere and are disciplined, your credit rating will improve, and you will once again have finance options available to you when you need them.

CAN I GET A HOME LOAN IF I’M BLACKLISTED? We are unable to assist you with a home loan so long as you have a poor credit record. Our approval process is based on National Credit Act requirements and includes an assessment of the client’s credit profile, and it is important to have a good credit record, so repairing a bad credit record is essential and should be considered as the first step before applying for any loan. 3

You can obtain a copy of your credit record once a year for free from any of the credit bureaus. If there are any overdue accounts or judgements, you would need to contact the respective creditors to make the necessary arrangements to settle the debt incurred. You can then contact the credit bureau with the proof of settlement to have the judgement removed from your credit record. In the event of bankruptcy, sequestration or liquidation, the credit bureau will need a valid court order (Rehabilitation Certificate), to cancel a sequestration or administrative order on your credit record. All credit providers have credit policies and processes in place that must be satisfied before any lending can be considered.

WHAT IF I’M UNDER DEBT REVIEW? We’re unfortunately unable to assist you with finance options for as long as you’re engaged in the debt review process. It is only once you have fully paid up your accounts and the debt counsellor has issued you with a clearance certificate, that your credit record will reflect in the positive, at which point you’ll be able to apply for additional lending.

WHAT ARE THE BENEFITS OF SWITCHING? Your home loan is a powerful tool for managing your finances. Switching your bond can unlock significant benefits, such as: • Gives you access to any additional value in your property (known as equity) • Allows you to use any equity to reduce your expensive, short-term debt

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• Gives you the option to free up cash to use on projects such as home improvements • Helps you maintain a healthy credit profile • Results in an increased surplus on your monthly budget • Ensures your property investment works harder for you • There’s no cash outlay - the costs are included in your home loan • With SA Home Loans, it’s a simple process - we’ll take care of all the paperwork.

HOW DOES DEBT CONSOLIDATION WORK? Debt consolidation allows you to convert your existing up-to-date, short-term debts into a single, manageable monthly loan payment. This means you have fewer monthly debt repayments and an improved cash flow. It also means you save on multiple fees, service charges and debit order charges that were payable on your previous debts. Consolidating your debt means you pay off high-interest, short term debt (such as store cards, personal loans etc) with a lower interest rate loan which also usually has a longer term – like your home loan. If your home has increased in value since you first bought it, you can apply for additional funds on your existing bond or switch your bond to a new lender, allowing you to access the increased value in cash – using this cash to pay off your debt.

HOW DO YOU CALCULATE INTEREST RATES? Unlike some other institutions, our rates at SA Home Loans are not dependent on a client’s portfolio with us - our rates are risk profile dependent. This means that the lower the perceived lending risk, the lower the interest rate we’ll charge, and vice versa. 5

Common factors taken into consideration when calculating home loan interest rates include the deposit percentage and your credit rating. For example, the bigger the deposit put down on a property, the lower the home loan interest rate will be. Take 100% loans for example – they don’t require a deposit but attract a higher rate. A similar principle applies to a credit rating, in that the higher an applicant’s credit score, the lower their interest rate will be.

ARE THERE ANY EXTRA OR “HIDDEN” COSTS I NEED TO PREPARE FOR? In addition to the purchase price of a property, there are some other upfront, once-off costs which you’ll need to include in the total amount: • Transfer Duty – this is a tax paid to SARS every time a property changes ownership. Properties with a value of less than R1 000,000 are exempt from transfer duty. Properties purchased from a developer are exempt from transfer duty, but will incur VAT on the purchase price. • Attorney transfer cost– payable to the attorney for transferring ownership into your name, calculated according to the purchase price. The attorneys will also charge you for smaller variable costs such as FICA fees, instruction fees and postage. • Bond registration cost– payable to the bond registration attorneys for registering your bond with the Deeds Office. • The above costs are detailed in this Info section HERE

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• Initiation fee – levied by your bond provider as a once-off fee for processing your home loan application. At SA Home Loans, this is R6037.50 and applicable to all property values Once you’re a home owner, there are also regular monthly costs to consider that you may not have had if you were renting: • Municipal rates, water and electricity costs • Insurance costs – Home Owners Cover and Bond Protection Cover • Maintenance costs

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www.sahomeloans.com T’s and C’s apply. Please refer to our website for further details. SA Home Loans is a Registered Credit Provider. Registration Number NCRCP1735.