Moving your bond

[DK@MyBroadband]

I am busy going through the application to move my bond. With that comes the cost of registering a new bond for a better interest rate hopefully

Has anyone been through this process and how long does it take to move the once you have agreed to do so?

Trying to understand the time and effort needed to complete process.

Thanks guys!

 

[The_Mowgs]

I am busy going through the application to move my bond. With that comes the cost of registering a new bond for a better interest rate hopefully

Has anyone been through this process and how long does it take to move the once you have agreed to do so?

Trying to understand the time and effort needed to complete process.

Thanks guys!

I cant help you with your question but could you provide more info regarding the move of your bond if you dont mind. From which bank to where are you moving it?

Did you get a significantly lower interest rate from the new institution?

 

[Neo_X]

I am busy going through the application to move my bond. With that comes the cost of registering a new bond for a better interest rate hopefully

Has anyone been through this process and how long does it take to move the once you have agreed to do so?

Trying to understand the time and effort needed to complete process.

Thanks guys!

not sure on the time (although i have seen some banks ask for a 90 days notice?)

but what did catch me out - after getting quotes from 4/5 banks and spending the time submitting all the documentation - the receiving bank will only take the loan, if you take out a max 80% loan (eg if your loan vs value amount is above 80% you will need to pay in)

 

[rorz0r]

Do the 90 day notice to avoid extra costs. You're going to have to pay a bond initiation fee (R5700 usually) and attorneys fees (depends on amount). Also don't forget you can just renegotiate the rate on the existing bond and avoid the fees. (but it's pretty much like a new application)

 

[saturnz]

Also don't forget you can just renegotiate the rate on the existing bond and avoid the fees. (but it's pretty much like a new application)

with FNB, you just fill in a form requesting a reduction and they let you know two or three days later, its strictly not a renegotiation but it doesn't hurt asking.

I succeeded in having my rate reduced twice by 0.35%, you can ask for a reduction every six months but after they declined a second time I didn't bother again.

Just as a side note. I settled my bond today.

 

[rorz0r]

No income and expense statement?
I'm going to cancel my bond now and apply for a new one anyway, moving house though.

 

[MickeyD]

Just as a side note. I settled my bond today.

Awesome feeling, yes?

Did that in September...

 

[saturnz]

Awesome feeling, yes?

Did that in September...

yes I'm still trying to absorb it, I owed them about 50k for the past year and last week they pissed me off, so I decided to settle it and no longer give them money.

 

[Coasti]

I succeeded in having my rate reduced twice by 0.35%, you can ask for a reduction every six months but after they declined a second time I didn't bother again.

Did not know that. What do you use as motivation, why would they do it? Especially if the see you put in some extra from time to time.

 

[Greg C]

I am busy going through the application to move my bond. With that comes the cost of registering a new bond for a better interest rate hopefully

Has anyone been through this process and how long does it take to move the once you have agreed to do so?

Trying to understand the time and effort needed to complete process.

Thanks guys!

Love the question

Answer: A lot of the banks will offer you the option of moving your bond to them
There are however some specific conditions that underline this deal
Most notably
1) If you move your bond to the transferring bank for a better rate, fnb/rmb will pay the costs associated with that move BUT, if you leave to transfer the bond again in a 5 year period they will claw back the cost from you
2) Rates. Rates back in the day were given at prime or prime minus to a max of around prime -2. Anything beyond this point is no longer even remotely profitable to a bank, so dont expect these levels due to profitability and due to the property market since 2008 being rather volatile.
3) Transfer costs, and initiation fees are applicable but are relative to the property and to the attorneys doing the transfer and new registration - so pick your attorneys smartly. Dont just let the bank pick whoever is on the panel. Be proactive here. Remember it is your right to choose the attorney and the bank will check if they are on the applicable panel and will accept going forward.

Side notes= Flexi reserves/facilities are facilities available to client who HAVE EQUITY in the property

Lets discuss scenarios=1 My properties value went up but I dont have a flexi reserve, new valuation done, new bond registration done for the higher value OR you can apply to have a flexi reserve on the CURRENT registered bond amount
Conditions? Flexi reserves are an option given at time of a registration of the bond with the bank. 2 you must have had the bond with the bank for a minimum of a year preferably 2 to see the servicability.3 Equity is the difference between registered amount/ value or loan and the balance of the home loan.

4) I would love to use my flexi reserve for my big expenses at a great rate- This is abused like you cannot believe. Do as you please with the equity of your property but be warned. SARS have a knack of looking into big transactions. There is a particular reason we do personal loans, vehicle finance etc because financing should be applicable to the asset aquired and risks attributable to that asset. Flexi reserves were originally designed for you to access the equity of the property to further improve the property. Kitchen re done pool, garden
Not to buy a car, business loan to a friend. Whilst hard to administer and watch as a bank. SARS do quite fine on flagging large transactions specifically decided by them. Its fine if you are that person but its a different ball game if you are having to explain the source of funds of how you bought a business and the finance applicable for it after trying to get the reduction etc. Fun fact of the day

Hope this helped

 

[gjm]

with FNB, you just fill in a form requesting a reduction and they let you know two or three days later, its strictly not a renegotiation but it doesn't hurt asking.

Where do I get the form to request a reduction in my FNB bond interest rate?

 

[saturnz]

Where do I get the form to request a reduction in my FNB bond interest rate?

give the home loan division a call and they will mail you the application form, this should really be a sticky since I do recall mentioning this several times to people, I'm amazed so many bond holders do not know about this.

 

[Former member 61586]

4) I would love to use my flexi reserve for my big expenses at a great rate- This is abused like you cannot believe. Do as you please with the equity of your property but be warned. SARS have a knack of looking into big transactions. There is a particular reason we do personal loans, vehicle finance etc because financing should be applicable to the asset aquired and risks attributable to that asset. Flexi reserves were originally designed for you to access the equity of the property to further improve the property. Kitchen re done pool, garden
Not to buy a car, business loan to a friend. Whilst hard to administer and watch as a bank. SARS do quite fine on flagging large transactions specifically decided by them. Its fine if you are that person but its a different ball game if you are having to explain the source of funds of how you bought a business and the finance applicable for it after trying to get the reduction etc. Fun fact of the day

Hope this helped

What is the implications of using your "flexi" portion to buy car cash with regard to SARS?

 

[borga]

give the home loan division a call and they will mail you the application form, this should really be a sticky since I do recall mentioning this several times to people, I'm amazed so many bond holders do not know about this.

Well it is not in the banks interest to inform you of ways to reduce the amount of money you pay them, so they are not going to try raise awareness,

 

[Greg C]

If you are talking practically
ZIP. If you are talking theoretically. Alot. I know that every year a portion of each banks books are checked against clients records for anomalies. In the real world you have next to no chance of ever having an issue with SARS. But as I mentioned they randomly do a search as records must be kept for 5 years. If they happen to find the needle in the haystack where you bought a car with your flexi reserve, they will charge you the applicable difference in market interest rate difference they deem applicable for the appropriate finance.
EG Bond gets 9% you buy a car with the flexi. Normally you get charged 12 %.That 3 % they charge you backdated as a penalty for being under the normal mmarket rate and deemed rate.

 

[Former member 61586]

If you are talking practically
ZIP. If you are talking theoretically. Alot. I know that every year a portion of each banks books are checked against clients records for anomalies. In the real world you have next to no chance of ever having an issue with SARS. But as I mentioned they randomly do a search as records must be kept for 5 years. If they happen to find the needle in the haystack where you bought a car with your flexi reserve, they will charge you the applicable difference in market interest rate difference they deem applicable for the appropriate finance.
EG Bond gets 9% you buy a car with the flexi. Normally you get charged 12 %.That 3 % they charge you backdated as a penalty for being under the normal mmarket rate and deemed rate.

Where does it say you cannot use the flexi for anything other than home improvements?

 

[hellfire]

I am busy going through the application to move my bond. With that comes the cost of registering a new bond for a better interest rate hopefully

Has anyone been through this process and how long does it take to move the once you have agreed to do so?

Trying to understand the time and effort needed to complete process.

Thanks guys!

Takes same amount of time as if you were purchasing a house.
Bank on around 3 months

 

[saturnz]

Well it is not in the banks interest to inform you of ways to reduce the amount of money you pay them, so they are not going to try raise awareness,

I was angry about the fact that I was charged prime plus 0.8% because the bank considered me a credit risk for having no credit history, when I expressed this to them they suggested I apply for a reduction in three months time.

This should be read together with Greg's comments though, if you are already below prime or close to it don't expect a reduction.