Contact us on 031 010 0509 or send a WhatsApp to 079 376 2899.

Person standing in front of doormat and wondering if they can take out a mortgage after debt review

Can I Take Out A Mortgage After Debt Review?

Many people know debt review as debt counselling that consumers use as a solution to help over-indebted South Africans manage their finances more efficiently. It can provide you with the support you need to meet your financial goals, especially when considering taking out a home loan.

If you are someone who is towards the end of their Debt Review journey and wondering how long afterwards you can take out a home loan, or someone who is considering entering into Debt Review and needs more information on the potential constraints regarding credit, here’s what to consider.

Can I Get A Home Loan?

Let’s get straight into it – If you are still under debt review, unfortunately you will not be granted allowance to acquire credit of any type, especially a long-term commitment loan such as a mortgage. Your mortgage eligibility will be decided by credit providers who will distinguish this based on your credit profile through credit bureaus such as Experian and TransUnion. Should you decide to make your inquiry during debt review, your credit profile will be flagged as ‘under debt review’ and you are likely to be declined from getting more credit.

Your most wise decision would be to wait until the completion of your debt review journey before considering purchasing a home. If you are already a homeowner, it would be safer for you to include your home loan into the debt review process.

Debt Review Timeframe

Looking at your calendar moving closer and closer to your final payment date is probably an anxious and exciting feeling all at once, because it means you are almost debt-free but also causing you to consider your life post-debt. Typically, the lifespan of the debt review process can be between 36 – 60 months, but the length of the review process is dependant on a few things such as:

  • The amount of debt you have
  • Your monthly debt repayments
  • Changes in your financial circumstances during debt review
  • Your personal commitment towards repaying your debt

In summary, the more debt you have, the longer it may take to get rid of it. Luckily, your repayment time can reduce if you received an increased income and use it to pay extra towards your repayment. If you are looking for ways to make more money, here are some side hustle ideas that can help you pay-off your debt. You can also consider reducing your living expenses, and adding the difference towards your repayments.

How Long After Debt Review Can I Take Out A Mortgage?

In theory, you should be able to apply for credit within a week of receiving your clearance certificate. However, you shouldn’t rush into taking out credit or entering into new debt – be it good or bad – right away. You will need to allow credit bureaus some time to update their records accordingly, to reflect that you are no longer in an active debt review.

Furthermore, it is important to allow yourself to rebuild your credit score, as it may have been affected by you being under debt review or you being previously over-indebted. Your credit score may take a while to become good but as some time passes, your score will become better and in a few months time you will be in a much better position. If you are wondering what factors affect your credit score, our blog has some insights for you. Here’s our recommendation – wait at least 3-6 months after repaying.

If you are interested in resolving your debts through debt review, you can visit our Debt Movement page where we explain how Debt Movement can help you and where to apply!

If you are struggling with debt and thinking about entering into debt review, Debt Movement is here to offer you non-judgemental debt advice and financial guidance. Request a free call back today with our understanding and caring team.