When it comes to securing a loan to build a new home, it is essential for the owner to provide a range of additional documents to the financial institution before the loan will be finalised or payments can be made to the builders.

According to The Property Factor’s Tess Rodrigues, anyone who wants to use bank finance to build a new property must provide copies of the plans, a copy of the tender and building contract, a certificate from the National Home Builders’ Registration Council (NHBRC) and a schedule of finishes along with a detailed list of specifications.

The other standard documents, such as an Offer to Purchase, identity documents of the owners and proof of income must also be supplied.

Should the bank approve the loan, the conveyancing attorneys then needs to have the mandatory FICA documents, a copy of the approved plans from the municipal authority, a building contract and a waiver of a lien from the builder, a copy of the builder’s insurance certificate and proof that the property has been enrolled with the NHBRC.

The owner of the property will usually be granted a bond based on the value of the land and the improvements to it, which normally includes the buildings. Thus if the bank grants an 80% bond it means that the owner will have to find the balance of 20% on transfer of the property and registration of the bond.

Rodrigues says that the first stage of building has to be financed by the owner and only after that will the bank allow progress payments to be made to the builder. The progress payment must also be authorised by a bank’s valuer who will assess the work done and its approximate value.

Rodrigues says that generally banks will make four or five progress payments to the builder but as soon as the first payment is made, the owner’s home loan account is debited and this amount attracts interest from the outset and must be paid monthly.

She warns that anyone considering building a home should be thoroughly familiar with the loan terms and conditions otherwise he or she might be stuck with an incomplete home that needs to be completed.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

If you’re buying a home, you’ll be following the following steps in getting your new bond through Mortgage Plus:

• Arm yourself with information – Use our handy Mortgage Calculators to give you an idea of what home loan you could qualify for and what size mortgage bond you can afford.
• Apply on-line and / or
• Speak to a specialist home loan consultant – Call your closest branch or our Contact Centre on 011.327.4489 to discuss your needs with our specialist consultants who can advise you on the products that suit your specific needs.
• Confirm your credit status and see what you can afford – our consultants will assist you to clarify your credit worthiness and affordability for a new home loan.
• No-obligation proposal – We’ll prepare a no-obligation proposal for you including all the costs, interest rates and mortgage installment for you to evaluate and review.
• Sign the Acceptance – Once you sign your acceptance of the offer, we take care of all the red-tape. You just need to send us some documentation and we take care of the rest.  Your consultant will do all the leg-work and will guide you and manage the process, step-by-step.
• Property Valuation – A Valuator will call at your convenience to value your property.
• Conveyancing – Our national panel of attorneys will prepare all the necessary bond registration documents and will contact you to make an appointment to sign all the documentation.
• Lodgment – Lodging your bond registration is the next step and happens immediately after you sign your papers at the attorney. Re-registration can be effected within 45 days. We’ll keep you posted.
• Registration – Once registered, you can look forward to the ongoing amazing service which our client services team offers you over the life of your bond. If your needs change, your home loan will keep pace with you and your lifestyle.

What documentation is required?

If you are employed, you’ll need to provide us with the following documentation:

• Proof of income: your latest salary advice. If you earn commission or overtime, please provide the latest three salary advices. (For both applicants if applicable)
• Three months personal bank statements. (For both applicants if applicable)
• Copy of your ID document. (For both applicants if applicable)
• Copy of Marriage Certificate or ANC Contract. (If applicable)
• Copy of the Purchase Agreement.

If you are self employed, you’ll need to provide us with the following documentation:

• Proof of income: Letter of Drawings from an Accountant. (For all applicants if applicable)
• Six months personal bank statements. (For all applicants if applicable)
• Six months business account bank statements.
• Last two years’ Financial Statements.
• Copy of your ID document. (For all applicants if applicable)
• Copy of Marriage Certificate or ANC Contract. (If applicable)
• Copy of Registration Documents or Trust Deed. (Whichever is applicable)
• Copy of Purchase Agreement.

How long does approval take?

• Approximately five working days
• Approval in Principle takes two working days
• Valuation takes approximately three working days

By choosing Mortgage Plus for a loan, you will get that continual service to make sure you are getting the best deal possible.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za