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  You need to shop for a mortgage and request comparable quotes from various lending institutions. You also need to provide the information and documents required by the conveyancer as quickly as possible.

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About

Home Loans

Our focus is the provision of a total service to you - from inception to successful completion of your building project. When it comes to financing, there are a variety of Home Loan and Interest Rate Options to choose from. So here are some links to help you

save some money. 

At right are the four aspects relating to home loans that this page covers:

If you’re new to this type of thing and you want some more very useful information you can also take a look at – Ananzi's "Homely Tips" by clicking here.

Ananzi is South Africa's biggest search engine.

Shopping Your Loan

Documents Needed When Applying For A Loan

A Quick Guide To The Transfer Process

Why You Should Pay Your Bond Faster Than Required

Shopping Your Loan

Buying or building a home is exciting, but can also be a time of anxiety and apprehension. Whether you are buying or building a home for the first time or thinking about a second home, you've got some options you should look at. (Please also read our Finance All Your Needs page: it is more focused on large commercial loans, but is well worth reading.)

The various sites we will be referring you to further down have interactive calculators to help you make the best decision. You'll even find Affordability Calculators to help you assess how much home you can afford and what your monthly installments will be. Bond Registration and Transfer Cost Calculators are also extremely handy tools, which allow you to calculate the 'hidden costs' associated with home financing and the impact on the final loan amount you may require. Please remember that most of these calculators relate to buying an existing home and consequently do not cater for "interim interest" - the interest you pay on the draws your building contractor will take during the course of erecting your home.

Most of these sites have a "Call Me" link for you to have an experienced mortgage consultant contact you. It is recommended that you take advantage of this option - you could save a lot of money by shopping for the best loan.

Because of South Africa's somewhat peculiar monitory structure there is virtually no difference in interest rates between the various banks whose links are below. The other two can however make a significant difference to you and you should definitely take a look at both of these sites.

Simply clicking on any of the images below will take you to that organization's website.

Building-sa.co.za - Image Link to ABSA

Building-sa.co.za - Image Link to FNB

Building-sa.co.za - Image Link to Standard Bank

Building-sa.co.za - Image Link to Nedbank Building-sa.co.za - Image Link to Nedbank

Building-sa.co.za - Image Link to SA Home Loans

Building-sa.co.za - Image Link to Mortgage SA

Documents Needed When Applying For A Loan

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Completing an application is just one of the many things you need to do in order to obtain financing. You will need to provide a variety of documentation to help your lender. The information required will vary depending on the lender you choose, your loan option, and your personal financial situation. But, the following is a list of documents generally required when applying for a new home loan. (It is recommended that you have these items available when completing your application - this will ensure a fast and easy loan process). See also our Finance All Your Needs page.

All Applications

  • A copy of your ID document

  • A copy of the offer to purchase containing seller and purchaser's details (not necessary for a pre-approval application)

  • Proof of income (Generally, you will be required to produce a salary slip (not older than 2 months) or a letter from your employer with a breakdown of your salary and deductions. If you are self-employed then you will need to produce a letter from your accounting officer confirming your income, or a statement of assets and liabilities.) 

Companies I Close Corporations

  • Copy of financial statements - You may be required to produce a full set of financials e.g. balance sheet, income statements etc, which must be signed by your auditor.

  • Details of all the directors/ members

  • Founding statement of the close corporation

  • Close corporation certificate

  • Company certificate

  • Memorandum and Articles of Association

  • A resolution by the directors/ members of companies/ close corporations advising who may sign the home loan application/ pre-approval for the purchase of the property

Trusts

  • A copy of the Trust Deed

  • A resolution advising who may sign the home loan applications/ pre-approval

  • A resolution by trustees advising who may sign the documents and purchase properties

Once you've begun the application process, your property finance consultant will advise you of all the documentation required for your situation. But keep in mind - the more information you have ready before you apply, the faster your loan will be approved.

A Quick Guide To The Transfer Process

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You may have bought a stand and you're wondering why it's taking so long for registration into your name. You could benefit immensely by taking advantage of and using these hints to make your transfer speedy and effective. Here is a guide of what happens when transfer takes place and your bond is being registered: 

The parties involved in the sale or purchase of an immovable property are:

  • Seller

  • Estate Agent (normally)

  • Buyer

  • Transferring Attorney (appointed by seller to transfer the property to the buyer's name)

  • Bond Attorney (appointed by the bank granting the bond)

  • Cancellation Attorney (appointed by the bank that holds the seller's existing bond)

The same attorney could be dealing with more than one or all of the above transactions.

Step 1: Purchasing a property

The buyer and the seller sign the Offer to Purchase. The buyer normally applies for a bond from a loan institution.

Step 2: Bond Approval

The loan institution approves the bond and advises the Bond Attorney to register the bond.

Step 3 : Property Transfer

The seller advises his Transferring Attorney to transfer the property. (Assuming that there is a bond registered over the property, the Bondholder (normally a Bank) is requested in writing by the conveyancer to inform him/ her of the amount required to cancel the bond. This is referred to as the 'Bond Cancellation figures'.) Simultaneously, the Bondholder is asked for the original Title Deed. This is forwarded to the Bondholder's attorney, and subsequently to the Seller's conveyancer. 

At the same time, the Municipality (or Managing Agent in the case of a Sectional Title unit) is asked for a Rates Clearance certificate. This is a certificate, which is normally valid for a period of three months and serves as proof that the Seller has met his obligations for rates and taxes, and water and electricity. (To establish this figure you can simply multiply the last statement received from the municipality by three.) (Often, to speed up the process, the Seller will be asked to furnish the Conveyancer with the funds required to obtain the Clearance certificate from the Municipality (or Managing Agent) prior to even signing the documents.)

Step 4 : Bond Attorney contacts Transferring Attorney

The Bond Attorney (the buyer's loan institution's attorney) advises the Transferring Attorney (seller's attorney) of the amount available for guarantees and requests the draft deed of transfer and guarantee requirements.

Step 5 : Cancellation Attorney

The Cancellation Attorney (the seller's loan institution's attorney) is requested to cancel the seller's bond upon receipt of a guarantee for the amount owing.

Step 6 : Transferring Attorney (Conveyancer)

Upon receipt of the Title Deed and cancellation figures, the transferring Attorney sends a copy of the deed of transfer and the guarantee requirements to the Bond Attorney. The Transferring Attorney (conveyancer) prepares the transfer documents for signature by the parties, who are then requested to sign them. The buyer pays the transfer costs and the Transferring Attorney then pays the rates and taxes; and also the transfer duty to the Receiver of Revenue in order to obtain a 'Transfer Duty' receipt.

At this stage, the Seller will also be asked to pay the Bondholder's attorneys the Bond Cancellation fee, which is then transmitted to such attorneys.

Your conveyancer will need certain documents to proceed and finalise the transaction. It is obviously advisable to ensure that the information and documents are made available as quickly as possible. Here's a list of what he or she will need:

From Both The Seller & Buyer

  • Copies of Identity documents, Antenuptial Contract, Marriage Certificate, Divorce Order (where applicable)

  • If the property is sold or bought by:

1.

A Company: 

Copies of the Memo and Articles of Association, Certificate of Incorporation, Certificate to Commence Business, and a copy of the first page of the authorised person's Identity Book;

2.

A Close Corporation: 

Copy of the CK1 (Founding Statement), and a copy of the first page of the authorised person's Identity Book;

3.

A Trust: 

Copy of the Trust Deed, Copy of Letters of Authority issued to Trustee/s, and a copy of the first page of the authorised person's Identity Book.

From The Seller

  • Name of Bondholder/s (i.e. Bank, Branch and Account number).

  • Valid Electrical Certificate of Compliance. (The Estate Agent involved in the transaction will normally be able to furnish you with the details of a qualified electrician should you need assistance in this regard.)

Step 7 : Bond Attorney

In most cases, the Purchaser will have applied for a bond over the property. The Conveyancer liaises with the bond registration attorneys immediately after being informed of who they are, and furnishes them with the draft title deed. The Bond Attorney prepares the bond documentation together with the relevant account. The buyer signs the documents and pays the costs. The Bond Attorney prepares and issues the necessary guarantees, forwards them to the Transferring Attorney and prepares the bond documents for lodgment in the Deeds Office.

Step 8: Transferring Attorney

The Conveyancer will then 'call for guarantees' for the outstanding amount of the purchase price. The guarantees will only be received after the Purchaser has signed the bond documentation with the bond registration attorneys and paid them. (It should be noted that this usually happens before signature of the transfer documents.) Once the Transferring Attorney has received the guarantees, they are forwarded to the Bond Cancellation Attorney.

Step 9: Bond Cancellation Attorney

The Cancellation Attorney obtains consent to cancellation from the bank which holds the seller's bond.

Step 10 : Documents prepared for the Deeds Office

After all the documentation has been signed and the costs paid, the transfer, new bond and cancellation bond documents are prepared by the respective attorneys for lodgment in the deeds office.

Step 11: Deeds Office

After all of the above has been done, the documents are lodged at the Deeds Office. By arrangement, the Conveyancer, Bond Cancellation attorneys as well as the Bond registration attorneys all lodge on the same day The Deeds Office can take anywhere between 2 - 8 weeks to check the documents before they are ready for registration by all the attorneys on the same day. The period should however be about 10 to 14 days. 

Step 12: Bank pays out the loan

On the day of registration: 

  • Guarantees are payable at a specified place after 15h00. In practice payment is usually made the following morning.

  • The Conveyancer will then draw a final account and pay the Seller the proceeds from the sale as well as the balance of rates and taxes. A final payment will also be made to the Purchaser in respect of monies due (if any) in respect of his or her share of the rates and taxes and any interest that may have accrued to him/ her from his/ her deposit. And the Estate Agent's commission is also paid out.

As you can see there are many different, and often, time consuming events involved - some of which are completely out of the conveyancer's control. This can be very frustrating to all parties. But, then of course, just like there are building contractors and there are building contractors, there are also conveyancers and there are conveyancers.

Probably the main factors that often delay the registration process are:

  • Failure by the seller and/or buyer to provide their personal information.

  • Failure by the seller to provide details of the bank holding the existing bond.

  • The existing bondholder delaying/not providing cancellation figures and Title Deeds to the Transferring Attorney.

  • Delay in receiving rates figures (local authority) and/or clearance certificate (Transferring Attorney)

  • Failure by the buyer to pay a deposit (if required).

  • Delay in the provision of guarantees.

  • Failure by the buyer to pay bond and transfer costs on time.

  • Delay by the seller in signing the transfer documents.

  • Delay by the buyer in obtaining government capital subsidy approval/employee subsidy documents for new bondholders and failure to comply with other requirements of the bank.

  • Delay by the buyer in signing transfer and/or bond documents.

  • When the Bond Attorney, Transferring Attorney and Cancellation Attorney are three separate firms.

Why You Should Pay Your Bond Faster Than Required

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It is essential that you pay additional amounts into your bond account. Any spare money you may have should go into this account. This is so for a number of reasons:

Firstly, your bond repayments are not tax deductible, while the interest on any type of savings you may make is. In a nutshell this means that if you're, for example, saving at 10% per annum you will have to pay tax on the interest received on your investment. And if the savings rate is 10% (as per example) the bond rate is going to be about 3-4% higher. So, when you pay extra money into your bond you are actually saving at 14%. So you are immediately scoring 3-4%. And on top of this it's a tax free saving.

Secondly, if you have a look at the capital repayments as related to your interest factor of your monthly payment you'll find that most of it is interest for a large number of years.

Please use the calculator below to work out your savings when you pay additional amounts on your monthly installments. It is one big eye-opener.

Type in the loan amount and the additional payment amount you would like to add to your original installment then click on the Calculate button.

 Loan Amount   

R

Additional Monthly Payment   

R

Annual Interest Rate   

 

%

Repayment Term
(20 years = 240 months)

 

months

Original Installment   

R

New Installment   

R

Period reduced by   

months

Value Saved   

R

 
                 Payment Comparison
Original Installment
 
New Installment
 
Monthly Installment
Repayment Term
 
months
 
months
Last Installment
 
Total Amount Paid
       

 

 

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We sincerely hope that this page is of value to you. And that apart from giving you a better understanding of the registration process involved in the transfer of immovable property you also end up saving yourself some money by shopping your bond and also paying your bond faster than required. 

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And while we actually don't deal in land, you could do well in contacting us if you should have some land for sale - we may just have a prospective client looking for land.

Our expert advice is only a phone call, fax or e-mail away

Tel: (011) 453 4401             Cell: 084 303 8179            Fax: 086 640 4667

E-mail: info@building-sa.co.za

 

Do you own a piece of land, would like to develop it, but don't have the funds or expertise? Click here to learn about our Joint Property Development Scheme.

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