GPF Mortgage – Home Loans

Why Do Banks Always Want More Documents?

GPF Mortgage – Home Loans

I'm sure you've experienced it...You complete the paper work, you give them your ID, pay slip, 3 months bank statement, statement of assets and liabilities, even tax returns...all but a hair and blood sample, and they still want more. The frustration mounts and both parties are angry.

I surely have experienced it myself!

GPF Mortgage – Home Loans

But who is to blame when it comes to the request of more documentation? The bank or the bond originator you've worked through.

There are 2 things to keep in mind when working with a bond originator:

GPF Mortgage – Home Loans

1)There is a minimum documentation list we must have before being able to submit an application to the bank, otherwise it's rejected or delayed.

2) Don't shoot the messenger! If the bank requests additional documents the originator has to request it from you. Believe me, if we could access the documents ourselves, so that we don't have to hassle you for more stuff we would.

GPF Mortgage – Home Loans

Why would they want more documents?

GPF Mortgage – Home Loans

There are several reasons the bank would require more documents, but mainly the request stems from only one problem: they can't verify income.

This mainly occurs when it comes to self employed or contract workers. In the case of a self employed individual the bank would require the latest 2 - 3 years financial statements, together with the latest 6 months business bank statements.

GPF Mortgage – Home Loans

If the income still doesn't tie up between the accountants verification of income > financial statements > bank transfers they normally request a SARS IT34

GPF Mortgage – Home Loans

Are you truthful when drawing up financials and submitting SARS

returns?

GPF Mortgage – Home Loans

If not, this could be a huge dilemma for you.

If your financials constantly show losses, then it could seem like the business is not doing well and is declining, which is a big red flag to the banks.

HIGH RISK!

So, rather be truthful and pay over those taxes. The more tax you pay, the more money you're making.

GPF Mortgage – Home Loans

So really, that's the main thorn in the side for prospective home buyers.

If they can't or are struggling to prove their income it's a big issue for the banks, because they can't lend carelessly and won't grant a loan to someone that can't prove sufficient income.

I hope that this article has made this a little more clear.

GPF Mortgage – Home Loans

Well, I know that is a lot for you to take in so I am happy to spend some time with you and answer any questions

you have about choosing home loans.

You are very welcome to contact my office at 086 110 6204 or send me a personal email at:

info@gpfmortgage.co.za