Home bond approved in Principle.

[GforceD]

Hi, can someone help me with the details here. First time buyer here.

So I put a offer on a house @ R2.2M

So the 2 of the banks have Approved In Principle R1.76M.

Now that have to evaluate the property.

What does this mean. Will they then approve the full amount, after evaluation?

The bond guy said they would then ask for the full loan after evaluation.

For those that have done this before pls can you explain this for me. Thanks.

 

[WAslayer]

Nah, I am thinking you will have to get ready to cough up the rest as a deposit, over and above the 220k odd, rough estimate, you will have to pay towards bond registration, transfer duties and transfer costs..

 

[GforceD]

Nah, I am thinking you will have to get ready to cough up the rest as a deposit, over and above the 220k odd, rough estimate, you will have to pay towards bond registration, transfer duties and transfer costs..

Hmm that's what I was afraid it meant.

 

[hellfire]

Hi, can someone help me with the details here. First time buyer here.

So I put a offer on a house @ R2.2M

So the 2 of the banks have Approved In Principle R1.76M.

Now that have to evaluate the property.

What does this mean. Will they then approve the full amount, after evaluation?

The bond guy said they would then ask for the full loan after evaluation.

For those that have done this before pls can you explain this for me. Thanks.

The rest you will need to put up as a cash deposit.
It's unlikely that you will get a 100% bond for a property in that price range (unless the property is worth far more than the price you have offered)

 

[zerocool2009]

True, the bank will revise, but the bank carries the risk!

Get cash, and workout the fees to get it on your name (sit down before you google that sum)

1. Did you looked at the rates and taxes before making an offer? (The valuation value)

 

[GforceD]

True, the bank will revise, but the bank carries the risk!

Get cash, and workout the fees to get it on your name (sit down before you google that sum)

1. Did you looked at the rates and taxes before making an offer? (The valuation value)

Yeah had a look at the rates, why?
Most bank calculators say I should be good for the amount. Guess I see when the banks get back to me.

 

[zerocool2009]

Yeah had a look at the rates, why?
Most bank calculators say I should be good for the amount. Guess I see when the banks get back to me.

Because you can see if your offer is “over paid” or not

 

[Mike Hoxbig]

Yeah had a look at the rates, why?
Most bank calculators say I should be good for the amount. Guess I see when the banks get back to me.

You should be good according to the calculators, but when it comes to the actual application it changes.

With the current economic environment, you should be happy with a 95% bond. They have to factor in risks such as if the interest rate had to change to pre-pandemic levels.

After the valuation you should get the final quote. At this point you can negotiate for a better rate and/or higher amount. But I wouldn't get my hopes up for the full amount. Hope you have enough cash to put towards the deposit...

 

[deweyzeph]

I was able to get a 100% bond for a R2.25 million property, so it's not impossible. However the 100% bond was approved in principle before they even sent their evaluator, so I'm not sure if the evaluation will see them budge on their position.

 

[jezzad]

Dont forget transfer and legal fees

 

[Sheppard_za]

Question: If you apply for a 100% bond at say R2.2m and the bank only approves R1.76m are you still bound by the OTP or not since you didn't get the bond from the bank for what you applied for?

 

[shooter69]

Question: If you apply for a 100% bond at say R2.2m and the bank only approves R1.76m are you still bound by the OTP or not since you didn't get the bond from the bank for what you applied for?

Nope

 

[deweyzeph]

Question: If you apply for a 100% bond at say R2.2m and the bank only approves R1.76m are you still bound by the OTP or not since you didn't get the bond from the bank for what you applied for?

It depends on how the suspensive clause regarding the bond in the OTP is worded.

 

[STORMERSFAN]

Maybe the place is only worth 1.8m?

 

[WAslayer]

Question: If you apply for a 100% bond at say R2.2m and the bank only approves R1.76m are you still bound by the OTP or not since you didn't get the bond from the bank for what you applied for?

Nope

It depends on how the suspensive clause regarding the bond in the OTP is worded.

Pretty much this ^^.. the clause may be written in such a way that a bond approved, even if not for the full purchase amount, the OTP would still be valid and you would have to cough up a deposit..

 

[deweyzeph]

Pretty much this ^^.. the clause may be written in such a way that a bond approved, even if not for the full purchase amount, the OTP would still be valid and you would have to cough up a deposit..

Yip. When I bought my place I made sure that the OTP was clear that only a 100% bond approval would result in the suspensive condition being fulfilled. Far too many people don't read the OTP carefully, and even worse, don't modify it to suit their circumstances before signing.