house loan info

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thedutchman

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my parents were given a very good deal on a house, but would have to sell our house first. can one apply for a home loan with our house as collateral ? how does it work?
 
hey

if u mean use your current house as collateral - so basicly take a home loan on ur current house to buy the new house. then yes u could probly do that, but would pay quite a lot of penalty fees if u cancel the loan in a couple of months when u sell ur current house. which u would have to do. i woudnt really recommend that, u would be wasting quite a lot of money. U could however just take a home loan out on the new house that u are buying. its quite standard to use the house u are buying as the collateral on the loan.

u could also link the purchase of the new house with selling ur current house. but most sellers wont go for this since it could delay the sale. however if u do need to sell ur house and cant afford to keep both houses, then this is a very important thing to put in the purchase contract. e.g. ur offer on the new house is only valid given that u sell ur current house within 30 days. or how ever long u want and can get the seller to agree to. most estate agents woudnt encourage this option since it could delay or cancel the transaction, but in the current market conditions its definitely recommended.
 
thedutchman said:
my parents were given a very good deal on a house, but would have to sell our house first. can one apply for a home loan with our house as collateral ? how does it work?
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Either the house gets sold or it acts as collateral, not both.
 
Plus you say the house is worth a couple of million more?

If the deal looks too good to be true, be wary...
 
BrokenLink said:
u could also link the purchase of the new house with selling ur current house. but most sellers wont go for this since it could delay the sale. however if u do need to sell ur house and cant afford to keep both houses, then this is a very important thing to put in the purchase contract. e.g. ur offer on the new house is only valid given that u sell ur current house within 30 days. or how ever long u want and can get the seller to agree to. most estate agents woudnt encourage this option since it could delay or cancel the transaction, but in the current market conditions its definitely recommended.
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Most sellers and agents have no choice, but to accept this condition. There'd be very few house sales if deals were not contingent on selling a current property.
 
ToxicBunny said:
Plus you say the house is worth a couple of million more?

If the deal looks too good to be true, be wary...
Click to expand...

you see, the house was on an auction and when it was supposed to be auctioned off, noone pitched up.
the house is nearly finished with a couple of tiles still to be placed.. its a brand new house and noone has ever living in it.
the builder was a very well known builder who only build the best houses in town...
 
thedutchman said:
you see, the house was on an auction and when it was supposed to be auctioned off, noone pitched up.
the house is nearly finished with a couple of tiles still to be placed.. its a brand new house and noone has ever living in it.
the builder was a very well known builder who only build the best houses in town...
Click to expand...

My first question would be, how long has the first houses morgage been active?
 
thedutchman said:
just buy the new one and sell the old one
Click to expand...

Well probably the easiest would be to buy the new one with a homeloan, while trying to sell the old one. When they have sold the old one they pay the homeloan after the mandatory time when early settlement fees don't apply anymore (they would need to give 3 months notice anyway to avoid penalties) . They should then also have some money left over which should rather be added to their retirement savings and not splurged on anything else.

Anyone see a flaw in my logic?
 
Hi Guys,
I have bought a house which was registred in April 2010. I got loan from Nedbank at prime +1.25. I had to take it because the other banks were taking too long to respond and i did not have much time.
Now i want to look at moving the bond and getting better interest rate.
Can anybody explain the whole proceedure and costs involved in moving the bond from one bank to another bank?
The present bond is less than 6 months. I want to know everyhing including the cancellation costs and registration costs.

Thanks in advance
 
Prime +1.25 is actually not a bad rate in this market. Gone are the days where people get prime minus easily on home loans. First place to start would be seeing what rate you can get from other banks. There might be an interest penalty which can be waived if you give the required notice, and then bond registration costs which you would have to pay in cash based on a sliding scale of the bond amount. The bank will also charge a R5700 initiation fee.
 
broken1 said:
Prime +1.25 is actually not a bad rate in this market. Gone are the days where people get prime minus easily on home loans. First place to start would be seeing what rate you can get from other banks. There might be an interest penalty which can be waived if you give the required notice, and then bond registration costs which you would have to pay in cash based on a sliding scale of the bond amount. The bank will also charge a R5700 initiation fee.
Click to expand...
Thanks Broken1. So can i assume that total costs would be bond registration costs+ initiationfee, if i give required notice?
 
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