Offer to purchase question

cguy said:
Q: I saw earlier that you got a 100% bond. Was there any interest rate penalty for that?
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APoc184 said:
Yes all of our quotes came back as 100% bond approvals. No penalties or anything that I'm aware of.

We simply had to ask the bond originator to fight for a better interest rate for us with FNB. Standard bank was way off so even if they did come back with a better deal they would never have even beaten FNB's original quote. And although it was only a little drop it still makes a big difference in the long run.

And ABSA and Nedbank never even came back to us.
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I can confirm that there was very little penalty with 100% bond. Granted, over a long period of time it will probably add up but in the short term it gives us more flexibility to pay transfer/bond costs as well as fix up what we want when we move in.
Between me and partner, we have 3 properties.
2 properties had 90% bonds and roughly prime less 0.5 on both.
Latest property we just bought we got prime less 0.35 on 100%.
So roughly 0.15% difference between 90% and 100% bonds, however the 100% loan was on the equivalent of our first 2 properties.

@APoc184 with my bond originator, Absa was way off, standard bank was lowest in terms of a no conditions rate, and FNB was lowest with the additional 0.25 off because I'm a customer. Nedbank took too long and tried to phone us 2 days after we accepted final FNB so they didn't come to the party.
We were happy with first FNB offer and ready to accept. Before we even mentioned our interest to FNB or originator, FNB already sent a valuator to the property all within 3 days of sending our application documents. The official quote arrives and they dropped their initial rate even lower without us prompting.
So now I'm even happier with FNB and we accept with origininator. Suddenly Absa drop their initial offer by almost a whole percent and are the lowest, and we asked FNB to match and they beat Absa offer by 0.05.
I've been really impressed with FNB during this time. They really really really wanted our business and got all the admin stuff out the way the quickest. Within 2 hours of accepting fnb, their chosen bond attorney contacted us to get the ball rolling so we had no choice in bond attorney.
Sorry to hear your FNB experience hasn't been the same. One of the properties is with Absa and I'm so tempted to move all business to FNB but don't want to pay a bond attorney fee again.

Something I wasn't expecting during this process was that the insurance/replacement value of the building was nearly double our purchase price.
So insurance cost has doubled more than my budgeted amount but made us feel good about the value we are getting for purchase price. Our other properties are in complexes and insurance value and purchase price were more in line with each other.
 
cguy said:
Sounds good. It's been many years for me, but I recall interest rates going up as the bond approached 100% since it means that the bank takes on a lot more risk.
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Yes. Bond Originator did mention something along those lines. Because he asked if we wanted to apply for a 105% loan to cover transfer costs. And we asked what the implications will be. He said that the interest rate will probably be a lot higher because of the risk.

Chances are good that we could have gotten a better deal if we did offer a 10% deposit. But we are going to use that cash for transfer and registration costs as well as upgrades and few new things for the new home. And obviously want to keep as much saved up as possible.

We are getting an extra bedroom as well as an extra living space. Plus the pool, lapa and extra guest toilet. So some extra furniture, curtains, pool covers, patio set etc will be needed. And wife already said she wants to spend money on decent block out curtains for the bedroom and tv room this time around.
 
APoc184 said:
Ours is close to R1.5m.
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RedViking said:
Awesome. So about R15 000 to also budget for general maintenance.
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APoc184 said:
Yes we are also budgeting around that range.
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APoc184 said:
Chances are good that we could have gotten a better deal [on the bond] if we did offer a 10% deposit. But we are going to use that cash for transfer and registration costs as well as upgrades and few new things for the new home. And obviously want to keep as much saved up as possible.

We are getting an extra bedroom as well as an extra living space. Plus the pool, lapa and extra guest toilet. So some extra furniture, curtains, pool covers, patio set etc will be needed. And wife already said she wants to spend money on decent block out curtains for the bedroom and tv room this time around.
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Those sound like good plans. Do you aim to achieve your whole list (including building on that new extra bedroom) on that 10% of R1.5m = R150 000, less transfer and registration costs, or did you mean that you want to keep that sum to add to your other savings earmarked for transforming the house?
 
Gozado said:
Those sound like good plans. Do you aim to achieve your whole list (including building on that new extra bedroom) on that 10% of R1.5m = R150 000, less transfer and registration costs, or did you mean that you want to keep that sum to add to your other savings earmarked for transforming the house?
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Yeah sorry. I wasn't too clear.

We are not building on new rooms. We are currently renting a 3 bedroom house with 2 living spaces. Our new home is already a 4 bedroom with 3 living spaces, additional guest toilet, pool, lapa and a bar area. So lots of extra space to fill up.

Planning on using the R150k for transfer and registration costs and then getting gas stove, garden/pool maintenance/repairs and furniture for extra space.

Really trying to keep most of our savings intact but the R150k we pretty much budgeted for the above mentioned things when we started looking at houses.

I know new additions and big upgrades are not cheap. So R150k won't go very far at all.
 
So this is probably a stupid question again.

We know we have to pay transfer and bond registration costs. And we have an estimate of how much it is.

But when exactly are these payable?

1 week from now?
1 week before transfer and registration is finalised?
When you get the keys?
Somewhere in the middle?

We are not 100% sure about this.
 
APoc184 said:
So this is probably a stupid question again.

We know we have to pay transfer and bond registration costs. And we have an estimate of how much it is.

But when exactly are these payable?

1 week from now?
1 week before transfer and registration is finalised?
When you get the keys?
Somewhere in the middle?

We are not 100% sure about this.
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The bond should be upcoming but not sure if it's a week or 2.
Transfer will be somewhere in the middle.

Edit: I looked at the tracker from their systems and probably both in the middle, but depends on how fast they get documents drawn up, etc.
Screenshot_20200815-145416_Gmail.jpg
Screenshot_20200815-145600_Gmail.jpg
 
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Fcon_Vpro said:
Edited my post. Looks like I might have been a bit off on bond but depends on how quick they get it going
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Nice! Is that your progress tracker from the transferring attorneys or the bank?

The weekly report we received from the attorneys last night has similar check points but is just on a spreadsheet in a PDF.
 
APoc184 said:
Nice! Is that your progress tracker from the transferring attorneys or the bank?

The weekly report we received from the attorneys last night has similar check points but is just on a spreadsheet in a PDF.
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There should be a website? Basically how I tracked mine.
Transfer fees etc should be within a month. You pay before you sign at the attorneys (at least that’s what they told me )
 
APoc184 said:
So this is probably a stupid question again.

We know we have to pay transfer and bond registration costs. And we have an estimate of how much it is.

But when exactly are these payable?

1 week from now?
1 week before transfer and registration is finalised?
When you get the keys?
Somewhere in the middle?

We are not 100% sure about this.
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The costs must be paid as soon as possible, the attorneys can't take any fees at this stage but they have to secure the costs.

It is the attorney's job to make sure that all finances are in place, you don't want to come to the end of the deal and then the buyer does not have the costs. Nobody is going to be happy about that.
 
APoc184 said:
Turns out extension wasn't needed. But better safe than sorry.

Literally signed the approval for new FNB quote 45min ago. They came back with a prime rate. Which saves us only a few hundred per month from the original quote. Seems like nothing but over 20years it adds up.

Transferring attorneys also just confirmed they received everything and is going ahead with the transfer and registration.
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Was about to say a few hundred a month is a couple of hundred thousand over 20 years.

Now go and set your debit order STATICALLY well above what you need to pay but is still comfortable for you so that you are always overpaying it and saving even more and it never adjusts away.
 
richjdavies said:
Careful there, interest rates are exceptionally low right now. When they go up, you might want that debit order to vary...
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Nein.

You should be planning now for the “usual” interest rate (10% would be good) and plan (and pay) accordingly.

That way you’ll never feel the pain when it goes up.

Besides the way the bank’s debit orders work they adjust upwards automatically.

The worst thing you can possibly do right now is to have a linked debit order and pay less while the interest rate is low and keep giving the bank your hard earned cash for 20 years.

Pay your house in 10 years. It’s not hard with small sacrifice and priority planning.
 
APoc184 said:
So this is probably a stupid question again.

We know we have to pay transfer and bond registration costs. And we have an estimate of how much it is.

But when exactly are these payable?

1 week from now?
1 week before transfer and registration is finalised?
When you get the keys?
Somewhere in the middle?

We are not 100% sure about this.
Click to expand...

Trust me the lawyers will demand the money when it’s required.

Don’t you worry about it, just make sure you have it instantly available.
 
APoc184 said:
Nice! Is that your progress tracker from the transferring attorneys or the bank?

The weekly report we received from the attorneys last night has similar check points but is just on a spreadsheet in a PDF.
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Both. One is for the bond attorney and the other for transfer attorney. Both seem to be using the same system that emails me updates regularly.
 
Does anyone know the process of extending your bond from 20 years to 30 years. What will the cost be?
 
Steamy Tom said:
Don't do it
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Depends on your circumstances. I’m actually paying off a 20 year bond under a 7 year term. Since I used my folks flexi homeloan. We can still afford the payments. Would free up allot of my cashflow though.
 
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