Credit Habits That Quietly Destroy Your Home Loan Chances

Credit Habits That Quietly Destroy Your Home Loan Chances

Most people think bond approvals come down to income.

They don’t.

Banks lend based on risk, and risk is measured through your credit behaviour over time. Not just missed payments—patterns. Habits. Decisions you made months or even years ago.

Here are the most common credit habits that quietly weaken your profile and cost buyers approvals, good interest rates, or entire property deals.

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Utility Bills: The Small Accounts That Cause Big Problems

Municipal accounts, electricity, water, refuse, and rates are often overlooked. That’s a mistake.

In South Africa, utility bills are credit-reportable. Late payments, disputes, or arrears show up and stay there.

Banks interpret unpaid utilities as basic financial mismanagement.

If you struggle to pay for water and electricity on time, lenders assume a home loan will be worse—not better.

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Internal link suggestion:
👉 How Municipal Arrears Delay Property Transfers in Cape Town

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Frequent Requests for Credit Lines Signal Financial Stress

Every time you apply for credit, a hard enquiry is logged.

Multiple enquiries in a short period raise alarms.

Examples include:

• Store cards

• Personal loans

• Overdraft increases

• Credit limit extensions

Even if you’re approved, the damage is already done.

Banks don’t see “opportunity.”
They see cash-flow pressure.

Too many enquiries suggest you’re plugging gaps instead of managing money.

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Internal link suggestion:
👉 How Banks Calculate Bond Affordability in 2026

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Business Credit Cards Are Not Invisible

Business owners often assume business credit doesn’t affect personal lending.

That’s incorrect.

If you’re:

• A director

• A sole proprietor

• A personal surety

Then business credit cards and facilities count as personal exposure.

Banks assess total liability, not how you label it.

Strong turnover won’t save you if business debt eats into affordability.

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Internal link suggestion:
👉 Home Loans for Self-Employed Buyers in Cape Town

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Co-Signed Loans Count as Your Debt

Co-signing is one of the most damaging “helpful” decisions people make.

Even if the other party pays perfectly:

• The debt counts against you

• Your affordability drops

• Your risk profile worsens

If they default, the damage is immediate and severe.

Banks don’t care who uses the asset.
They care whose name is on the contract.

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Car Leases Reduce Bond Approval Power

Car leases feel manageable monthly. Banks see them differently.

They calculate:

• Total outstanding balance

• Remaining term

• Fixed monthly commitment

Vehicle finance competes directly with property finance—and loses.

High car instalments are one of the biggest reasons buyers qualify for less house than expected.

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Internal link suggestion:
👉 What Reduces Your Home Loan Approval Amount?

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Little or No Credit History Is Not a Strength

Many buyers believe avoiding credit makes them safer.

Banks disagree.

No credit history means:

• No repayment track record

• No risk behaviour data

• No proof of discipline

This is known as thin credit—and it raises uncertainty.

Lenders prefer controlled, well-managed credit over none at all.

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Ignoring Your Credit Report Is the Costliest Mistake

Credit reports are not self-correcting.

They contain:

• Old defaults

• Settled accounts marked incorrectly

• Duplicate listings

• Fraudulent accounts

If you don’t check it, the bank will—and they won’t fix it for you.

Buyers regularly lose approvals over issues they didn’t know existed.

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Internal link suggestion:
👉 How to Clean Your Credit Profile Before Buying a Home

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Why This Matters in the Cape Town Property Market

Cape Town is competitive.

When multiple buyers make offers, sellers favour:

• Strong approvals

• Lower risk

• Faster transfers

Credit quality affects:

• Approval speed

• Interest rate offered

• Deal certainty

Two buyers can earn the same income.
The one with better credit wins.

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Lake Properties Pro-Tip 🏡

If you plan to buy or sell within the next 6–12 months, audit your credit profile now.
Fixing errors, settling strategic debts, and reducing exposure early can improve approval odds, unlock better interest rates, and strengthen your negotiating position.

In property, preparation isn’t optional—it’s leverage.

Call to Action

Ready to explore the best investment opportunities in Cape Town? 

Contact Lake Properties today and let our experts guide you to your ideal property.

If you know of anyone who is thinking of selling or buying property,please call me

Russell 

Lake Properties

ww.lakeproperties.co.za  

info@lakeproperties.co.za 

083 624 7129 

Buying a Fixer-Upper in Cape Town.Is It Worth It?

Lake Properties                       Lake Properties

Lake Properties                      Lake Properties

Buying a Fixer-Upper: Is It Worth It?

Fixer-uppers attract buyers for one main reason: potential. The idea of buying low, renovating smartly, and walking away with a more valuable home is appealing. But potential means nothing if the numbers do not add up or the renovation becomes a bottomless pit.

A fixer-upper is worth considering when the purchase price is low enough to justify the work, and when you have the budget, capacity, and patience to manage the process. If you are easily overwhelmed, time-constrained, or tight on cash flow, this is not the route for you.

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The Good Side: Why People Choose Fixer-Uppers

Strong Entry Point Into Better Areas

A fixer-upper lets you buy into suburbs that would usually be out of reach. You pay less upfront, but you land the location you actually want.

Big Potential for Value Growth

If you buy smart, you can dramatically increase the property’s value with well-planned renovations. Many buyers build instant equity the moment the project is completed.

Customisation and Creativity

You get to choose the finishes, change layouts, modernise the feel, and turn a tired property into a standout home. It is ideal for buyers who enjoy creating something unique.

Less Buyer Competition

Most buyers want move-in-ready homes. That means you often face fewer competing offers, which puts you in a stronger negotiating position.

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The Tough Side: What Makes Fixer-Uppers Risky

Renovation Budgets Rarely Stay Perfect

Unexpected issues almost always appear—damp, electrical faults, plumbing nightmares, rotten roofing, you name it. If you are not prepared for cost overruns, you can find yourself in financial trouble halfway through.

It Takes Time and a Thick Skin

Renovations are messy, noisy, and stressful. Contractors run late, materials arrive damaged, and sometimes workmanship is not up to standard. You must be willing to push, follow up, and stay involved.

Financing Is Not Always Straightforward

Banks sometimes decline homes with severe defects until repairs are done. This can force buyers into alternative financing, which comes at a higher cost.

Easy to Overcapitalise

If you spend more than what the suburb can support, you will not recover the money when you sell. This is one of the most common mistakes with fixer-uppers.

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How to Assess a Fixer-Upper Properly

1. Do a full inspection before committing. This is non-negotiable.
2. Get multiple renovation quotes, not just from the cheapest contractor.
3. Know the ARV (After Repair Value) by comparing renovated homes in the same immediate area.
4. Add a buffer, at least 15–20 percent on top of your renovation budget.
5. Check the compliance side—plans, zoning, permits, and municipal records. Surprises here can halt your project.

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When a Fixer-Upper Makes Solid Sense

• You want a good suburb but at a lower buy-in.
• You enjoy hands-on projects or have a reliable contractor.
• You are investing strategically and looking to force appreciation.
• You have time, patience, and cash flow to manage delays.

If you tick these boxes, a fixer-upper can be a high-reward decision. If not, a turnkey home may be safer.

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Lake Properties Pro-Tip

Target properties with cosmetic problems, not structural ones. Paint, tiles, lighting, cabinetry, and fixtures give you strong returns. Issues like foundation movement, severe damp, or major roof failure devour your budget and destroy your return on investment.

Call to Action

Ready to explore the best investment opportunities in Cape Town? 

Contact Lake Properties today and let our experts guide you to your ideal property.

If you know of anyone who is thinking of selling or buying property,please call me

Russell 

Lake Properties

ww.lakeproperties.co.za  

info@lakeproperties.co.za 

083 624 7129 

Lake Properties                       Lake Properties