How do I Correctly Declare Expenses on a Home Loan Application in South Africa?

Question

MyProperty · Accepted Answer

Correctly declaring your expenses on a home loan application is crucial for getting the best deal. Here's how to ensure you do it right:

1. Avoid Duplication

• Single declaration: If you prepay into your credit card for groceries and petrol, don't list these expenses again separately.

• Co-applicants: Only one applicant should declare shared living expenses like rent, water, and electricity to avoid duplication.

2. Be Honest

• Accuracy: Dishonesty about expenses can lead to application rejection. Banks will verify your expenses against your payslip and six months’ worth of bank statements.

• Transparency: Ensure all declared expenses match your financial records.

3. Differentiate Needs from Wants

• Essential costs: Include necessary expenses like education or essential recreational activities.

• Discretionary spending: Avoid overestimating expenses for non-essential activities like movies or dining out, as these can be adjusted during tough times.

For more detailed guidance, consult your bank or a financial expert. Correctly declaring your expenses can significantly improve your chances of securing a favorable home loan.

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