The Home Loan process in South Africa

And you thought traffic is stressful. Buying a home and registering a bond can be even more stressful and can take about as long as it takes to find the proverbial needle in a haystack.

These are usually the role players

– Seller

– Buyer

– Estate Agent (if applicable)

– Transferring Attorney (appointed by the seller)

– Bond Attorney (appointed by the bank)

– Cancelling Attorney (appointed by the bank cancelling the sellers bond)

If possible, try and use the same attorney to speed things up.

Seller and Buyer sign an offer to purchase

The buyer contacts either their bank or more recommended a bond originator. The bond originators negotiate excellent rates and, in most instances, get a better rate than your own bank.

The Approval

The bank approves the home loan and instructs the bond attorney to register a mortgage bond

The Property Transfer

The seller instructs the transferring attorney to transfer the property

The title deed and cancellation figures are requested from the bank that holds the bond over the property

A statement of rates and taxes is requested from the local authority (stick around, this can take ages)

The Transferring Attorney

The transferring attorney receives the title deed and cancellation figures, and sends a copy

The transferring attorney asks the buyer and seller to sign the transfer documents

The buyer pays the transfer costs (ouch)

The Cancellation Attorney

The cancellation attorney is requested to cancel the seller’s bond on receipt of a guarantee for the amount owing

The Bond Attorney

Bond attorney contacts transferring attorney (and chat about the old varsity days)

The bond attorney advises the transferring attorney of the amount available for guarantees, and requests the draft deed of transfer and the guarantee requirements

The bond attorney prepares the bond documentation together with the buyer

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 mortgage bond documents for lodging at the Deeds Office

The Deeds Office

All the documents are lodged simultaneously at the Deeds Office by arrangement with all the attorneys concerned

The Deeds Office takes about two to three weeks to check the documents before they are ready for registration by all the attorneys on the same day.

The Bank

On the day of registration, the bank pays out in accordance with the guarantees issued

Allow at least three months for the registration and transfer of the mortgage bond

What could delay the registration of a mortgage bond?

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

Delay in receiving rates figures from the local authority and/or clearance certificates

Delay in the provision of guarantees

Failure by the buyer to pay transfer and/or bond costs on time

The seller delays the signing of transfer documents

The buyer delays the signing the transfer and/or bond documents

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

The existing bond holder not providing cancellation figures and title deeds to the transferring attorney

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

The buyer delays obtaining employee income documents for new bondholders, and a failure to comply with other bank requirements

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