Purchasing a home and registering a bond can be quite confusing. However with Mortgage Plus, your consultant will simplify the process, keeping you informed throughout the property transfer and will be on hand to give you professional advice until the day you move into your new home.

Here are some pointers that describe the house buying process and your involvement in it, as well as give you insight into some of the behind the scenes activities.

Assess your financial position
As buying a property can be the biggest purchase you make in your lifetime, assess your financial position first and make sure you are ready for this commitment.

See how much you can afford
It’s very important to know exactly what you can afford before you start house hunting. Mortgage Plus can offer you a free affordability assessment. We will also explain all the costs involved in buying a home, including up-front payments, monthly repayments and any other costs that may occur as a part of the property transaction. Follow the guide on the Cost of Financing a Home to obtain an understanding of the costs involved in buying a home. It is important as the new National Credit Act wants to ensure you do not overspend and we can assist with a basic guideline on how to calculate the loan amount you can afford to repay monthly.

Choose an agent and view properties
Register with a few agents to ensure you are exposed to a variety of properties in your chosen area. Visit a number of homes before you make a decision. A Mortgage Plus consultant can assist you in finding a suitable agent in your area and will explain the different ownership options to you.

Sign an Offer to Purchase
Once you have decided on a property and signed an Offer to Purchase and the seller has accepted the offer and signed the document, the offer becomes binding by law and the transfer process can begin. There is however a cooling off period of 5 days for properties which are sold for less than R250 000, to allow you a grace period to review the property and the costs involved.

Obtain finance through Mortgage Plus
Your Mortgage Plus consultant will submit your application and the relevant FICA documents to one or more banks, which will assess the value of the property as well as your financial position. The bank will apply the credit assessment criteria as required by the National Credit Act and the financial risk criteria as stipulated in the bank’s terms and conditions for lending.Your Mortgage Plus consultant will then advise you of the offers they have obtained for interest rate and available loan amount, and will give you an informed recommendation.

Pay your deposit
Once you have chosen a bank, you will then (in most cases) be expected to pay your deposit to the attorneys dealing with the registration of your bond.

The property transfer begins
The bank will grant the loan and instruct the attorneys to start with the registration of the bond and transfer of the property into your name, as well as the cancellation of the seller’s bond. They will also obtain the title deeds and the transfer and tax clearance certificates. Registration, transfer and cancellation take place simultaneously and require the services of up to three different specialised attorneys.

Transfer documents signed and fees paid
The attorneys will complete the necessary administration. You and the seller will need to sign the transfer documents. At this time you will be expected to pay the transfer costs, registration fees and an estimated share of the rates.Registration documents are lodged at the Deeds Office. This is where the property will be registered in your name. Congratulations, the property now belongs to you!

Home loan comes into effect
Once you have received notification of the registration, your bank will pay the seller, or their bank, and your home loan will come into effect. The bank will notify you of this in writing and inform you when your first monthly instalment is due.

Taking occupation
You may take occupation as per the date agreed on your sales agreement. If you are already occupying the property, you will no longer have to pay occupational rent.

Who is involved in the purchase of a property?

• You (the buyer)

• The seller

• The estate agent

• The transferring attorney (also known as the conveyancer) – appointed by the seller

• The bond attorney – appointed by the bank granting the bond

• The cancelling attorney – appointed by the seller’s bank, to cancel their bond

How can you speed things up?

• Get pre-approval for your home loan

• Provide all requested personal and financial information

• Pay your deposit, if any, as well as bond and transfer costs on time

• Sign all documents when requested

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

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 South African residents who on a temporary basis live abroad can qualify for mortgage financing and will not be considered non-residents. The loan amount varies between 80%-100% depending on their individual circumstances. Exchange Control regulations do not apply to them.

However, they must have plans to return to South Africa and an application to emigrate must not have been made. A South African resident who has lived abroad for more than 5 years will be viewed as n non-resident for  the purposes of obtaining mortgage finance in South Africa.

Non Residents

A non resident is a person whose normal place of residence is outside the common monetary area of South Africa.

Non residents can buy property in South Africa, but should they require a mortgage loan it will be subject to foreign exchange approval from the South African Reserve Bank. The mortgage loan may not exceed 50% of the value of the property. The application to the Reserve Bank can be handled by any of the commercial banks through which such a person wishes to deal.

A non-resident may only borrow 100% of his borrowing base.  His borrowing base is funds that he brought into South Africa to buy the property. Proof must be provided that the funds physically came into South Africa, which can be done by the attorneys involved in the property transfer.

Let’s assume a non-resident wants to purchase a property in South Africa for R1 million and he brings R500 000 into South Africa for the purchase. The bank would then be prepared to grant him a loan for the other half. Thus they will be prepared to borrow him a maximum of 50% of the purchase price of the property, should he or she qualify for the loan.

A contract worker is defined as a citizen outside the common monetary area who has taken up temporary residence in South Africa to work in term of a valid work permit. They may be granted the same banking facilities as for SA residents

Contract workers are regarded as SA residents for the purposes of obtaining mortgage finance in South Africa and can therefore can qualify for a 100% mortgage loan.

However, on permanent departure from South Africa the mortgage loan must be reduce to a LTV of 50% 

Temporary residents

Temporary residents (foreign nationals) can qualify for a mortgage loan of up to 100% of the purchase price of the property.

On permanent departure from South Africa, the same principle as for non-resident purchasers will apply and the mortgage loan may have to be reduced to comply with the South African Reserve Bank’s  requirements.

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(011)327-4489 morne@mortgagepluscc.co.za