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Lake Properties Lake PropertiesHere's a more detailed breakdown of what it means to be pre-approved for a bond in South Africa, including the full context and process:
What is Bond Pre-Approval?
Bond pre-approval is a preliminary evaluation done by a bank or bond originator to determine how much money you might qualify to borrow when buying a property. It's based on your financial profile before you choose a specific property.
Why Get Pre-Approved?
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Clarity on Your Budget:
- You’ll know exactly what property price range you can afford.
- Avoids wasting time viewing homes outside your affordability.
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Better Bargaining Power:
- Sellers are more likely to take your offer seriously because you're seen as a ready and qualified buyer.
- Gives you an edge in competitive markets.
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Faster Bond Approval Process:
- Once you’ve found a property and signed an offer to purchase, the formal bond application is much quicker since you’ve already passed the initial checks.
What Happens During Pre-Approval?
The bank or bond originator will assess:
- Your income: Salary, self-employment income, etc.
- Expenses: Monthly living costs, existing loan repayments.
- Credit score: A higher score improves your chances.
- Employment status: Job security and income consistency.
- Debt-to-income ratio: To see how much of your income goes toward debt.
They’ll use this info to calculate:
- How much you can afford to repay monthly.
- The maximum bond amount you may qualify for.
- The likely interest rate you'll be offered.
Documents You’ll Usually Need:
- South African ID or passport
- Proof of income (latest payslips or financials if self-employed)
- 3–6 months' bank statements
- Proof of address
- List of monthly expenses and debts
What Pre-Approval Is NOT:
- It’s not a guaranteed bond. Final approval happens after:
- You’ve made an offer on a specific property.
- The bank has valued that property.
- You’ve submitted updated paperwork (if needed).
How to Get Pre-Approved in South Africa:
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Use a bond originator like:
- ooba
- BetterBond
- MortgageMarket These services are usually free and apply to multiple banks on your behalf.
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Apply directly through a bank like:
- Absa, Standard Bank, Nedbank, FNB, etc.
How Long Is Pre-Approval Valid?
- Usually 60 to 90 days.
- If your financial situation changes (job loss, more debt, etc.), it could affect your final approval.