Is a home loan prequalification necessary in today’s market?

SA’s property market remains primed for investment. The cumulative impact of the previous six rate cuts since September 2024, together with competitive bank lending, continues to support buyer activity and encourage more first-time homebuyers to enter the market.

However, when it comes time to buy, some may question whether a Prequalification Certificate – also known as a Qualified Buyers Certificate (QBC) – truly gives them the ‘edge’ in today’s housing market.

“Often underestimated, this document can offer significant benefits,” says Rhys Dyer, CEO of the ooba Group, adding that potential homebuyers can easily log on to free platforms to check their credit score, understand their affordability and receive a pre-approval certificate all within a few minutes.

Understanding the Importance of both pre-approval and a QBC

Dyer explains the difference between the prequalification and a pre-approval process, terms that are often used interchangeably by the market at large, adding that there is a clear difference.

“A pre-approval is a quick and simple way to determine what you can afford and what your credit score is by using an online pre-approval tool like a bond indicator,” says Dyer. “It increases your chances of having offers accepted by sellers and helps you to make adjustments to your finances as needed.

He adds that accessing a service like the bond indicator should be step 1 in every homebuyer’s journey. “The tool allows prospective buyers to check their credit score, determine their indicative affordability and receive a pre-approval certificate within minutes. This gives buyers an early indication of their home loan prospects and, importantly, a realistic price range in which to begin their property search.”

The next step is to obtain a QBC which takes the process a step further.

“A QBC is a more robust version of a prequalification. It is conducted by a home finance expert who carefully evaluates your affordability in much of the same way that the banks do. Documents are assessed, in-depth credit checks are performed, and your financial position is determined before you receive the certificate,” says Dyer.

The benefits of a QBC

He adds that a QBC’s secret weapon lies in its ability to mimic the steps a bank will take when analysing a homebuyer’s finances once they’ve applied for a home loan.

“A QBC places you – the homebuyer – in an elevated position as a ‘qualified buyer’, giving you more bargaining power when it comes time to negotiate the terms and conditions of the property sale agreement,” he says. “It is often conducted as a precursor to a home loan application and saves on approval times.”

Adding to its appeal is its high success rate, with ooba Home Loans’ data showing that 91.6% of its customers with a prequalification went on to have their home loans approved in August ‘26, with a 91.2% average during H1 ’26 compared to 90.8% during H1 ’25.

“While a QBC closely mirrors the affordability and credit assessments undertaken by the banks, final home loan approval remains subject to additional factors such as the property’s valuation and suitability as security for the loan amount, as well as any changes to the homebuyer’s financial circumstances between the time of issue and the formal home loan application,” explains Dyer.

Common FAQs answered

Dyer unpacks some of the commonly asked FAQs surrounding the process of obtaining a QBC as follows:

1. What are the financial requirements to receive a Certificate?

Dyer explains that the following financial indicators are assessed during the process:

• Credit Score: A minimum score of 610 is required.
• Income Stability: Consistent income for at least three to six months.
• Debt-to-Income Ratio: Existing debt payments should ideally not exceed 30% of the applicant’s monthly income.
• Employment status: Permanent employment improves the chances of an approval, however self-employed individuals can also qualify.

2. What happens if I am declined?

“The beauty of this process is that it allows you to address any weak spots prior to officially applying for a home loan,” notes Dyer. Here, potential homebuyers work alongside a team of experts, providing them with strategic insights into improving their credit score, reducing debt, accumulating more savings and organising documentation to strengthen future applications.

Added measures for success

The importance of shopping around for the best deal on a home loan is underscored by its high success rates. “Those using a home loan comparison service are privy not only to high bank approval rates but also to competitive interest rate concessions. In August 2026, ooba Home Loans recorded a national approval rate of 84.5%, while achieving an average interest rate of 0.75% below prime.”

Dyer concludes saying that having these powerful forms of free paperwork behind one’s name will help prospective buyers enter the market with confidence. “In a competitive market, being prepared can make all the difference between finding your dream home and missing out on an opportunity.”

Issued by Jess Gois