Questions Answered About Home Loans in South Africa
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Is bond registration costs included in a home loan?
You have to make prior arrangements with the bank if you want the bond costs included in the home loan. If you have not done this you will be required to pay the bond costs seperately and in full before the bond can be registered.
is it better to apply directly for a home loan or should I use a mortgage origanator?
Consider using a mortgage originator as they usually have contact with a large variety of banks which will compete for your business resulting in you getting the best deal on your home loan interest rate. Mortgage originators such as Private Sale also often have specials such as a cash back offer on your home loan.
Do I need life assurance before I can get a home loan?
This will be required if ceding the life policy for the value of the home loan is a condition for granting the home loan. You are not obliged to use the bank's insurance company but you can use another insurance company or cede an existing policy of your own.
What happens to the title deed after its registered?
The bank holds your title as collateral for as long as the home loan is operative and the title deed will only be returned to you once the home loan is fully paid.
How long does it take for the property to be registered?
Depending on the transferring attorney the registration process will take about four weeks. If it is an additional home loan on a property you already own registration should take no longer than two weeks.
Is it necessary to read through all the home loan documents?
You can rely on the bank's attorney to guide you through all the home loan documentation but you will need to acquaint yourself with the content of the documentation because, as far as the law is concerened, ignorance is no excuse.
When will my first home loan instalment be deducted?
The first payment on your home loan usually will be deducted on the first day of the month following the month of registration. When signing your bond documents the bank’s attorney should be able to tell you when the first payment will be debited from your account.
What is a cover clause?
The bank will add an extra amount of cover to their costs, usually about 20% of the capital amount of the home loan. This amount protects the bank against other creditors if you should default on your payments.
Do I have to use a debit order to pay the monthly instalments on my home loan?
The banks will most likely include the signing of a debit order as a condition of the home loan as the bank will then be sure that they will be paid each month. The bank will usually allow you to choose the day of the month that you want the payments to be deducted from your account.
How is the bond attorney selected?
The major banks all have a panel of attorneys in each town from which they randomly select an attorney to register the bond. Usually the banks transferring attorneys will also be used for bond registrations.