The short answer
It is worth having a credit check done. You may still qualify for a bank loan even with a bad credit record.
The whole question
I have been renting for the past seven years. The owner wants to sell the house, which means that my lease won't be renewed.
I have been given the option to purchase the house at a price R150 000, which is more than its value. I can't take out a loan at the bank because of my credit rating.
I am a single mother of three kids whose parents have passed on. I am the sole breadwinner in the house. I have to see to rent, electricity, groceries, school fees, and school transport fees. There is no other assistance from the father. If I don't succeed in purchasing this dwelling, I don't know where I will live.
The long answer
Thank you for your email about how you could buy the house you have been renting in Delft.
You say that you will not be granted a loan by the bank to buy the house which its owners want to sell for R150 000 because of your credit rating. It is true that if you have been blacklisted by a credit bureau, the banks will not give you a loan, but it may be worth checking exactly what your credit rating is. All South Africans are entitled to one free credit check a year through any registered credit bureau. A good score is between 680 and 766, and you will need to score above 640 to have a chance to qualify for a home loan.
The bank will look at your history of loan repayments, accounts and whether you are currently in debt or have outstanding judgements against you. Two years after your debt is repaid in full (plus interest) the credit bureau must remove the history of that debt from your record.
If the banks are willing to give you a loan, you may qualify for a housing subsidy from the Western Cape Government, provided you can prove that you have been registered on the municipal demand housing database (waiting list) for ten years. If your monthly income is less than R3,500, you would qualify for a finance-linked subsidy of R160,573, which can be used to buy the house you are renting. You would need to apply at your local municipal office or at the Human Settlements Department at 27 Wale Street in Cape Town. The Helpdesk number is 021 483 6488 / 3112 / 0611 / 8984 / 0623 from 7:30am – 3pm Mondays to Fridays. For more information, you can also email them at email@example.com.
Even if the banks do not approve a loan, it might be worth your while to discuss your situation with the local municipal office or the office in Cape Town, and see if there is some assistance they can give you.
The other thing to consider is that the children’s fathers should be paying maintenance for them, by law. For one child, a father must pay 12% of his gross weekly income and for two children, 16%. To apply for child maintenance, you go to your nearest magistrate’s court with the following documents:
Birth certificates of the children
Proof of residence
Proof of your monthly income and expenses (receipts for food and rent, electricity bill)
The personal details of the fathers, such as their names, surnames, physical and work addresses.
Copy of your bank statement
You will need to complete and submit form A, and you will be given a reference number. The court will serve a summons instructing the respondent to come to court on a specific date to discuss the matter. The magistrate will review all the documentation and will make an order, and may do so without the parties appearing in court. If the court finds that the father is liable for paying maintenance, payments must be made.
The court does allow a defaulting father to explain why payments have not been made, but if it finds he must pay, and he doesn’t pay, he can be jailed for up to three years as it is a criminal offence not to pay child maintenance. If you don’t know the father’s whereabouts, the court can trace him through requiring cell phone service providers to provide details of his phone contract.
It is very difficult for a single mother of three children to be the sole breadwinner, and we hope the court will help you get a more secure income.
Answered on July 10, 2019, 5:07 p.m.