#Thread About Getting a bond and considered rental income. As in the blog post link below, the bank wants to know if you can afford and pay back the money you will owe them through a mortgage.
You need some form of monthly income that you can prove to the bank that you are able to pay them back, whether that be through passive income (dividends or rental income) or through active income such as a job.
In general, banks favour employment sadly.
In general, banks favour employment sadly.
If you do have rental income, you will need a contract with rent being paid into your bank account for a minimum of 6 months - then the bank will consider 70% of this rental income as part of your gross income.
As you might know, you can only spend 30% of your gross income on home loans. So if have:
Salary R10k pm
R 13k rental
30% of the total of R20k
= just under 7k on home loans pm
Salary R10k pm
R 13k rental
30% of the total of R20k
= just under 7k on home loans pm
Some banks have made interesting stunts in the past, such as @AbsaSouthAfrica - where if you have 3 investment properties already, they will consider the new property's rental as potential income.
Sadly this is not the norm
Sadly this is not the norm
Another option would be to buy the property with a few people. I have done this successfully when I started out.
@njabulo_goje is doing amazing work with a property stokvel :)
@njabulo_goje is doing amazing work with a property stokvel :)
The crux is this: you need some form of guarantee or surety that the bank will get its money. It legally cannot borrow you money if you cannot afford it.
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