|
Access
Bond:
A form of mortgage which allows you to draw funds up to a predetermined loan
amount.
Administration Fee:
Fee charged by a lender to cover the initial costs of processing a loan
application. The fee may include the cost of obtaining a property appraisal, a
credit report, or other closing costs incurred during the process or the fee
may be in addition to these charges.
Affordability:
Lenders have certain criteria, which they use to determine what amount they
will lend to the individual on the basis of what they believe the individual
can afford. The individual’s monthly income must be of a permanent nature and
joint income may be taken into account where appropriate. As a general rule the
individual’s monthly installment should not exceed 30% of their gross monthly
income. This calculation is referred to as the Affordability factor.
Amortization:
This is a payment plan, which enables the borrower to reduce his debt gradually
through monthly payments of principal.
Application:
A form used to apply for a mortgage loan and to record pertinent information
concerning a prospective mortgagor and the proposed security.
Appraised
value:
An opinion of a property's fair market value, based on an appraiser's
knowledge, experience, and analysis of the property.
Appreciation:
This is the increase in the value of a house due to changes in market
conditions or other causes.
Assessment fee:
The fee charged by the bank when they asses the property’s value as the final
part of the bond approval process.
Bond
Cancellation Costs:
These are the various costs involved in the canceling of a bond, they are all a
flat rate so do not vary with the size of the bond. They include;
Attorneys' registration fee R500.00
VAT Deeds Office levy R55.00
Post and others R50.00
+ VAT
Total R682.00
In some circumstances the bank supplying the new mortgage may pay for the Bond
cancellation costs.
Bond Registration Fees:
The fees charged by the attorneys appointed by the bank to register the new
bond at the Deeds office. The fee is dependent on the size of the bond. Please
use the bond calculator to establish what the fee will be for a particular size
of bond.
Broker:
An individ fee or receive a commission for their services.ual in the business
of assisting in arranging funding or negotiating contracts for a client but who
does not loan the money himself.
Capital improvement:
Any structure or component erected as a permanent improvement to real property
that adds to its value and useful life.
Deed:
These are Legal documents that prove the ownership of a property. They are held
by the mortgage lender, and only released when full repayment of the loan has
been received
Deeds Office:
The government department which records the registration of transfers of
Immovable property.
Deeds Office Registration
Fees:
These fees are charged by the Deeds Office for registering the mortgage bond
and the title deed. Their levies vary according to the size of the bond amount:
? <=R150,000.00 - R200.00
? R150,001.00 – R300,000.00 - R260.00
? R300,001.00 – R500,000.00 - R340.00
? R500,001.00 – R1,000,000.00 - R400.00
? >R1,000,000.00 - R500.00
Default:
When an individual fails to make mortgage payments on a timely basis or to
comply with other conditions of a mortgage.
Deposit:
The sum paid to the seller on exchange of contracts to secure the purchase of
the property.
Equity:
This is the difference between the market value of a property and the
homeowner's outstanding mortgage balance.
Fair market value:
The highest price that a buyer, willing but not compelled to buy would pay, and
the lowest a seller, willing but not compelled to sell, would accept.
Fixed Rate Mortgage:
A mortgage in which the interest rate is set for an agreed period
Freehold:
Ownership of not only the property, but the land on which the property stands.
Inflation:
An increase in the amount of money or credit available in relation to the
amount of goods or services available, which causes an increase in the general
price level of goods and services.
Household Insurance:
Bond-holders are obligated by the lender to take out this insurance. It is
insurance against the cost of rebuilding a property from scratch following
structural damage, for example by fire, storm damage or flood. This is because
the house is the banks main security for the loan and if it is destroyed then
so is the banks security. Banks usually offer to insure the building for the
homeowner at an additional cost through their brooking arm. However you may
choose to insure the property with another institution, in which case Cape
& Country can help you get quotations if you tick the box marked LIFE &
SHORT TERM COVER box in the application.
See also Life Cover.
Interest:
The fee charged for borrowing money.
Interest Rate:
This is the percentage of an amount of money, which is paid for its use for a
specified time.
Life Cover:
This is life insurance cover for the bond-holder so that the home loan is
repaid in the case of death or disability. It is also known as income
protection insurance. Many banks insist upon lenders having it, and it must be
large enough to cover the entire bond. The premiums for the cover can be added
to the bond account monthly. Cape & Country can provide you with quotes for
the insurance if you so wish, all you have to do is click the box market Life
and Short Term cover on the application form.
Loan-To-Value Ratio:
The relationship between the amount of the mortgage loan and the appraised
value of the property expressed as a percentage. A LTV ratio of 90 means that a
borrower is borrowing 90% of the value of the property and paying 10% as a down
payment. For purchases, the value of the property is assumed to be the purchase
price, for refinances the value is determined by an appraisal.
Monthly installments
Monthly installments:
The amount you pay to your lender each month towards the overall loan. This
will be made up of repayments of the principal and of the interest charged on
the outstanding loan amount. As a rule your monthly installment should not
exceed 30% of your gross monthly income.
Mortgage or Bond:
An agreement between you and the bank, stating that the bank will lend you a
certain amount of money in the form of a home loan, and that you will pay the
bank back over a certain period, on a monthly basis, and at a certain interest
rate.
Re-mortgaging / Switching:
The refinancing of your property by paying off one loan with the proceeds from
a new loan secured by the same property
Remaining term:
The original amortization term minus the number of payments that have been
applied.
Stamp Duty:
Stamp duty is a tax imposed by the government
Variable Rate Loan:
The borrower’s home loan rate will rise or fall accord to the base rate
set by the Reserve Bank.
|