What to know before you apply for a home loan

Buying a home can be like embarking on an adventure. But the journey can be fraught with anxiety over what lies ahead. Will your credit score be good enough? Will you be able to cover the costs involved? Will the amount of time an application takes mean you miss out on the perfect home? Knowing what you’re in for can make the journey a lot less stressful, and a lot more fun.

Work out what you can afford

Before you can buy a property, you need to work out how much you can afford. Set realistic expectations – it’s not worth keeping up with the Khumalos. Beyond your monthly home-loan repayments, you’ll still need to cover the usual living expenses like groceries, transport and education, as well as any other debt you have. You also still want enough left over for savings, travel and entertainment.

Over-extending yourself with home-loan repayments beyond your means will put you more at risk should you run into financial challenges. You want to buy a home that ticks all the right boxes for you and your family, but is still priced within your means. You can enter your current income and monthly expenses into our affordability calculator to get an idea of the size of home loan you can afford.

Prepare for pre-approval

The best way to feel confident that you can afford the home you want is to get a pre-approval from the bank. This really lets you know how much you qualify for, saving you time and energy by focusing your attention only on those properties you can afford to buy.

As a prospective homeowner, the pre-approval shows an estate agent or seller your ability to buy a property. If you are in the market for a new home, you can use our pre-approval tool.

Check your credit record

When assessing your ability to repay a home loan, the bank will take into account your income and expenditure, and other financial commitments. 

If you’ve maintained a good track record of paying your accounts on time, your credit record will reflect this

Your current credit score will be checked, as well as your credit record – a history of how you’ve managed your debt in the past. If you’ve maintained a good track record of paying your accounts on time, your credit record will reflect this, increasing your chance of getting a home loan. (Learn more about maintaining a clean credit record and good credit score.)

In terms of the National Credit Act, banks also have a duty not to let clients become over-indebted, in other words taking on too much debt, which may lead to them defaulting on their payments at some point. So, if you are already heavily in debt, this could limit the size of the home loan you can be offered. It might be a good idea to spend a few months focused on reducing your total amount of debt before you apply for pre-approval or a home loan.


Did you know that on average, Nedbank pays out around R1.8 million a month in cash back on home loans? In 2023, we paid out more than R20 million in cash back on home loans. For an affordable home loan tailored to your circumstances and value-added extras like up to R20,000 cash back and a 50% discount on your attorney bond registration fees, choose the bank that’s best for your money.