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Bonds, Home Loans, Switches and Further Loans

What are the Costs Involved

There are a lot of hidden costs involved when buying a home and most people are actually unaware of them. Buying a home can be very exciting, but also very stressful, so it's always a good idea to plan ahead.

Before diving in head first, make sure you do your homework and get all the facts, as not to get any surprises at a later stage.

Costs

  • Deposit
  • Bond Costs
  • Transfer Duties
  • Conveyancing fees
  • Deeds Office Levies and fees
  • Rates and Taxes
  • Banks Charges
  • Home Owners Insurance
  • Life Insurance
  • Moving Costs
  • Water Bill, Electricity and Household Costs

Deposit

Most banks require a deposit when applying for a bond. The only time it isn't required is when you are a first time home buyer. The deposit generally depends on the value of the property, but in most cases is 20%.

Bond Costs and Transfer Duties

These costs are always overlooked when purchasing a property, and should be studied very carefully so that you understand how it is worked out. These costs can amount to thousand's of Rands, so make sure you know what they are as it will affect the total value of the property you are looking for. 

Note : If your are a First time Home Buyer you can have these costs included in your Home Loan.

Conveyancing Fees ( Transfer and Registration fees )

You have to pay the conveyancers (attorneys) who register the property in your name, as well as the conveyancers appointed by the bank to register a mortgage bond over your property. The Law Society has recommended tariffs that conveyancers may charge to transfer property into your name and register your bond. The higher the purchase price of the property, the higher the fee. The fee's are worked out on a sliding scale.

Examples

Transfer Costs ( excluding vat )

R 480,000.00 property cost - R 6,000.00 fee

R1,000,000,00 property cost - R 10,000.00 fee

In addition they also charge about R 250.00 for postage and sundry expenses.

Registration Costs ( excluding vat )

R 480,000.00 property cost - R 4,000.00 fee

R2,000,000,00 property cost - R 14,000.00 fee

In addition they also charge about R 250.00 for postage and sundry expenses.

Deeds Office levies and fees

The Deeds office is a government office that falls under the Department of Land Affairs. There are offices all over the country and they are responsible for the registration of ownership and other rights in immovable property.

Transfer Costs

Up to R 80,000.00 - fee is R 55.00

Between R 80,001.00 and R 150,000 - fee is R 200.00

Between R 150,001.00 and R 300,000.00 - fee is R 260.00

Between R 300,001.00 and R 500,000.00 - fee is R 340.00

Between R 500,001.00 and R 1,000,000.00 - fee is R 400.00

Between R 1,000,001.00 and R 2,000,000.00 - fee is R 500.00

Between R 2,000,001.00 and R 3,000,000.00 - fee is R 650.00

Between R 3,000,001.00 and R 5,000,000.00 - fee is R 800.00

Registering a Mortgage Bond ( Home Loan )

Up to R 150,000.00 - fee is R 200.00

Between R 150,001.00 and R 300,000.00 - fee is R 260.00

Between R 300,001.00 and R 500,000.00 - fee is R 340.00

Between R 500,001.00 and R 1,000,000.00 - fee is R 400.00

Between R 1,000,001.00 and R 2,000,000.00 - fee is R 500.00

Between R 2,000,001.00 and R 3,000,000.00 - fee is R 650.00

Between R 3,000,001.00 and R 5,000,000.00 - fee is R 800.00

For bonds over R 5,000,000.00 - fee is R 1,000.00.

Rates and Taxes

Property cannot be transferred from one owner to another until the rates due to the local authority have been paid in full for the financial year. The seller is liable for rates only for the part of the year during which he/she occupies the property. In addition to paying a pro rata proportion of the municipal rates for the year, the buyer will be charged for a rates clearance certificate which is about R 30.00. If you are buying a sectional title unit, expect to pay your levy up to the end of the body corporate's financial year, and to pay for a clearence certificate from the body corporate which is between R400.00 and R800.00.

Bank Charges

If you finance your new home with a home loan, you must make provision for the following charges.

  • Valuation Fee - Commonly known as an assessment fee to cover the costs of a bank appointed property assessor. The fee is between R1000.00 and R3000.00
  • Interim Interest - On the day the bond is registered, the bank releases the loan amount and charges interest from that day until the day on which the first installment is due. This can be added to the loan amount or can be settled immediately after the loan has been released.
  • Bond Initiation Fee - The bank may charge a once of fee ranging from R200.00 to R1250.00m to cover it's administration costs. The minimum fee for a loan under R500,000.00 is R175.00 excluding vat.
  • Administration Fee - Once your loan has been registered, the bank charges a monthly admin fee of R5.70 (Incl Vat) which is reflected on your statement as a separate item. Some banks charge R22.80 (Ex Vat ) on bonds over R500,000.00.

Home Owners Insurance

When taking out a home loan, the banks will insist that you take out home owners insurance, before the loan is approved. In fact it is a condition and in most cases, the banks will recommend their own brokers, so get a few quotes before signing your policy. For more information on home owners insurance Click Here .

Note : if you are buying a flat or sectional title unit, the home owners insurance is usually included in your monthly levy. Ask your estate agent about this when you make an offer to purchase.

Life Cover ( Insurance )

In most cases the banks will insist that you take out a life cover policy, if you don't already have one. Generally this is only required when the value of the property is less than R 150 000.00, but each Bank is different, so ask this question before applying for your home loan. Essentially this is for the protection of you and your family, ensuring that your home loan is settled in the event of your death. Most banks will have a brokerage firm that will draw up the policy for you, or you can apply for one on your own. - Click Here for a Free No Obligation Quote from 1 Life Direct.

Moving Costs

The cost of hiring movers is high, especially if you take out insurance to cover damage to your goods during your move.

Water Bill, Electricity and Household Costs

These expenses are often neglected when purchasing a property, although they have nothing to do with your home loan expenses, some of them are monthly expenses and must be taken into account when doing your budgets.

  • Water.
  • Electrical - Connection costs.
  • Telephone - Connection costs.
  • Curtains and Blinds.
  • Installation of a security system.
  • New furniture, if your new home is bigger than your old one.

Note : If you are purchasing a flat or sectional title unit, your water bill will be included in your monthly levy.

Discounted Bond Registration

Plus If you make use of our selected transfer attorneys, they will offer you 40% discount on the bond registration costs and their fee on the property transfer.

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