When South Africa introduced the National Credit Act, property professionals predicted doom and gloom and the end of the world. But how does the NCA affect you and your goal of owning your own home?
The first thing to realize is that it is not much you can do about getting around the act. And while estate agents may bemoan the NCA and how it affects their profits, the business of buying a home is not substantially altered from the traditional process. Realistically, you as a borrower are not much worse or better off when all is said and done.
Face it, the bottom line in getting a loan is what kind of risk you are to the lender. If it looks like you are not going to be able to make your payments, there is nothing any act or regulation is going to do to improve your creditworthiness, unless the government decides to start giving money away.
The process of buying a home still involves convincing lenders that you are going to be a reasonable investment. You can do this in all the traditional ways. Save your money to show that you have a commitment to keeping up with your financial obligation and that it is something you really want.
Don’t fall prey to the notion that the NCA is going to be a magic wand for anyone. If you have terrible credit or you are on a credit blacklist, you are not going to get a loan. You need to start working on turning your bad credit around and getting on the path to being someone who the banks will be comfortable lending money to.
You still have to follow all the practices that professionals suggest helping you get that first home
loan. You want to do your research. Find out what’s going on in the market. Make sure to maintain a
steady work history. There is nothing that stands out more to a potential lender than breaks in your
employment. It makes it look like you are not committed or that you cannot hold a job.
You want to take advantage of the tools that are at your disposal. One of the most useful tools is a computer and the Internet. So much information is available online that it makes no sense to take advantage of it. You can find quotes and terms and there is also a tool like the home loan calculator that you can use to get an idea of what to expect.
The best thing to do is not even to worry about how the NCA affects you. Leave the legal mumbo jumbo to the pros and focus on doing what you can to improve your creditworthiness. That way you can boast walking away with your first home loan when the time is right.