Fnb further loan '' Additional Charges'

[mjmapi]

Hi guys,

So I have a bond with Fnb, it's for about R900000, because I wanted to finish up some renovation I applied for a further loan for an amount of R200 000, pushing by new bond to R1100 000,

So application came back today, approved but I could not help but notice the additional charges listed for R40000, this they say it's for the lawyers, warra-warra, this and that bull****, R40000, right now thinking of telling them to shove the quote up their...

Is this a norm?, for this price? to me looks a ridiculous

Thanks

 

[itareanlnotani]

everything is negotiable.

tell them you don't accept the charges, and want a better quote.

 

[Kosmik]

Bond attorney fees etc. It:s not a straight forward loan, ask for a breakdown and see. Actual loan cost is normally around 5k, balance is prob lawyer fees.

 

[Sinbad]

Yup, registration of new Bond etc...

 

[mjmapi]

Thanks Guys, the response i get from FNB is that im not charged interest for this money and it will not affect my loan/repayments in any way, its in the event i default on my payment, FNB can then use this to pay lawyers for any required legal fees to sue me, i'm not sure if this makes sense, according to the consultant, they have to declare and state it on the document

 

[Kosmik]

Thanks Guys, the response i get from FNB is that im not charged interest for this money and it will not affect my loan/repayments in any way, its in the event i default on my payment, FNB can then use this to pay lawyers for any required legal fees to sue me, i'm not sure if this makes sense, according to the consultant, they have to declare and state it on the document

Thats not quite right.

Firstly you won't pay any interest on the additional funds until you utilize it, then it forms part of your normal monthly payment.
Secondly, there is normally an additional section of the loan ie: loan is 100K + 10k extension + 20k but you only see 110K. The 20k is held by the bank and only called in the case of defaulting for legal costs. YOU are not charged interest or anything regarding that additional R20k, that is purely managed by the bank until you default.
Thirdly, if you are extending a bond, it's similar to when you purchased the property the first time. It has to be legally drawn up and registered with the deeds office. You don't pay any transfer costs or conveyancing fees but you effectively pay the entire bond fees and attorney costs again.

 

[Sumen]

Thanks Guys, the response i get from FNB is that im not charged interest for this money and it will not affect my loan/repayments in any way, its in the event i default on my payment, FNB can then use this to pay lawyers for any required legal fees to sue me, i'm not sure if this makes sense, according to the consultant, they have to declare and state it on the document

So basically they don't have any legal aid cover .

So what happens it everything goes smoothly and they never have call a lawyer, do you get that R40 000 back?

 

[Ecco]

everything is negotiable.

tell them you don't accept the charges, and want a better quote.

This, negotiate.