Lessing advises buyers to consult a bond originator to determine their risk. "A good bond originator will be able to provide you with an estimate of the property you qualify for. Your bond originator will also be able to advise you on the deposit required as well as the different types of applications and documentation needed by each bank," Lessing says.

The banks rely on various documents to assess the affordability of home loan applicants. "These documents are scrutinized against credit bureau data available, your income and expenses stated and the National Credit Act," notes Lessing.

(Click here to learn how to improve your credit score.)

Affordability is key

Other main factors banks take into consideration when calculating your overall risk profile include the general affordability of the home loan, disposable income (funds available after all expenses have been deducted from the applicant?s salary) and deposit requirements.

"No more than 30 percent of the applicant?s gross income is used to calculate the maximum home loan amount. An applicant?s disposable income should furthermore exceed the monthly home loan repayment amount," says Lessing, adding that the time to buy property is now, seeing that good value-for-money investment opportunities are currently available.

"At the end of the day," he says, "buyers need to ensure that they have a decent credit record (click here to learn how to improve your credit record). But the fact that banks are now requiring smaller deposits is a good trend and is sure to further stimulate the upward swing of the local property market."

Good news on the home loan front on page three...