Loan To Value Ratio: Home Buying in South Africa

If you are a newcomer to the home buying and bond process you are presumably unfamiliar with the term loan to value ratio or LTV. First and foremost it is important to know that SA homeloans are given to the minimum amount of R100,000 to R150,000. An individual with good credit qualifies for a loan of about twenty-five to thirty percent of their annual income. Therefore people applying jointly will qualify for a higher amount. Banks issuing home loans rely on the loan to value ratio to determine exactly how much you qualify for and what the interest rate will be. The loan to value ratio depends on how much personal money you are putting towards the property and how much the selling price of the property is.