Offer to purchase question

TedLasso

TedLasso

Expert Member
Joined
Feb 23, 2016
Messages
3,757
Been following this thread with interest (excuse the pun). When I got my 50% HL with FNB three years ago, it was a prime -0.50 ... Is there actually a chance I could get a better rate if I asked. I know that all the extra money I pumped into the HL should be moved out before or they will lock it or something. Wondering how complicated it would be to ask. Can premier banking do this?
 
Thor

Thor

Honorary Master
Joined
Jun 5, 2014
Messages
44,236
newby_investor said:
It's not up to the bank as such though, it's generally the executor of an estate who will handle those sales.

You may be able to find such things going on sale if you regularly read your provincial gazette. Upon the death of someone, they have to print a notice for creditors or something like that. I forget the specifics.
Click to expand...
Aha, guess I'll search for weekly deaths now.
 
zerocool2009

zerocool2009

Executive Member
Joined
Sep 4, 2009
Messages
8,832
InternetLuddite said:
Been following this thread with interest (excuse the pun). When I got my 50% HL with FNB three years ago, it was a prime -0.50 ... Is there actually a chance I could get a better rate if I asked. I know that all the extra money I pumped into the HL should be moved out before or they will lock it or something. Wondering how complicated it would be to ask. Can premier banking do this?
Click to expand...

You can apply for a bond review ANYTIME. Its a 2 min application that you need to complete. With the low rates, I doubt they will change it now. I wonder if I must help or not (L O L).

You can always upgrade to PW and get another 0.25% off extra guaranteed !

Related to Premier (and PC) ... Just ask, they can either say yes or no (what do you have to lose) ?
 
Last edited:
R

Rocketjump

Member
Joined
Jun 27, 2017
Messages
15
Anyone have any experience with commercial property?
I currently own two residential properties and just purchased my first commercial and wow... won't be doing that again.

First of all, apparently you cant finance commercial property in your private capacity.

So I applied to all the big banks, ABSA said straight up no, it can't be done because I signed the offer to purchase in my personal capacity and an individual cannot finance commercial property. spoke to 3 people at absa all said the same, not even interested in looking at the paperwork or discussing.

That sucked as my other two bonds are with them.

Eventually, FNB made an offer using my business financials and financing the loan through the business with me signing surety and then registering it in my name.

Again this made no sense as I had all the paperwork and qualify for more than double I was asking for in my personal capacity and I have assets.

Then I got the final offer, 30% deposit, 10 years (both of which I was aware of ) then the shocker...
Prime +2.8 (my two residential bonds are at -0.75 and +0.6 )
a 5% penalty for early settlement +bond breakage fees.
0.2% penalty charged monthly on any extra payments into the bond.

It's crazy, but I had to sign as I need to move the business due to crime in the area getting out of hand and I'm out of time.

Is it possible to renegotiate commercial property terms at a later stage?

I did the math and the 0.2% penalty is heavy but you still save, on R100,000 I will save about R1,200 a month on repayments and pay a R200 a month penalty. no idea of the long tearm interest % saving, that is beyond my math skill)

Then I think I realized why they won't finance commercial property to individuals, doesn't the consumer protection act protect you against early settlement charges or penalties for prepaying a loan?

I take it by only giving the bond to business they have found a way around this?

I may be wrong though, this has been a big learning experience and would appreciate any insight.
 
Toxxyc

Toxxyc

Executive Member
Joined
Dec 12, 2012
Messages
5,100
I believe the CPA will not be as effective as it protects the consumer. If you're buying a business as a business, you're not a consumer per se, but I may be wrong.
 
N

newby_investor

Expert Member
Joined
Aug 8, 2018
Messages
4,322
Rocketjump said:
Anyone have any experience with commercial property?
I currently own two residential properties and just purchased my first commercial and wow... won't be doing that again.

First of all, apparently you cant finance commercial property in your private capacity.

So I applied to all the big banks, ABSA said straight up no, it can't be done because I signed the offer to purchase in my personal capacity and an individual cannot finance commercial property. spoke to 3 people at absa all said the same, not even interested in looking at the paperwork or discussing.

That sucked as my other two bonds are with them.

Eventually, FNB made an offer using my business financials and financing the loan through the business with me signing surety and then registering it in my name.

Again this made no sense as I had all the paperwork and qualify for more than double I was asking for in my personal capacity and I have assets.

Then I got the final offer, 30% deposit, 10 years (both of which I was aware of ) then the shocker...
Prime +2.8 (my two residential bonds are at -0.75 and +0.6 )
a 5% penalty for early settlement +bond breakage fees.
0.2% penalty charged monthly on any extra payments into the bond.

It's crazy, but I had to sign as I need to move the business due to crime in the area getting out of hand and I'm out of time.

Is it possible to renegotiate commercial property terms at a later stage?

I did the math and the 0.2% penalty is heavy but you still save, on R100,000 I will save about R1,200 a month on repayments and pay a R200 a month penalty. no idea of the long tearm interest % saving, that is beyond my math skill)

Then I think I realized why they won't finance commercial property to individuals, doesn't the consumer protection act protect you against early settlement charges or penalties for prepaying a loan?

I take it by only giving the bond to business they have found a way around this?

I may be wrong though, this has been a big learning experience and would appreciate any insight.
Click to expand...
Penalties for paying back debt faster than expected? That sucks balls...
 
R

Rocketjump

Member
Joined
Jun 27, 2017
Messages
15
Yeah it sucks, that is how I would normally combat the high rate, by just ploughing as much cash as possible into the bond to bring it down but with these penalties, it sucks balls big time.

@Toxxyc that's what I'm saying, I think they won't let you buy a commercial property in your individual capacity as then you are protected by the consumer act and cant be charged extra fees but because it's to a business they can basically do what they want.
 
N

newby_investor

Expert Member
Joined
Aug 8, 2018
Messages
4,322
Rocketjump said:
Yeah it sucks, that is how I would normally combat the high rate, by just ploughing as much cash as possible into the bond to bring it down but with these penalties, it sucks balls big time.

@Toxxyc that's what I'm saying, I think they won't let you buy a commercial property in your individual capacity as then you are protected by the consumer act and cant be charged extra fees but because it's to a business they can basically do what they want.
Click to expand...
So the way to get around that would be as @zerocool2009 does, pull out all the money from your residential properties' bonds, and buy the commercial property "cash".

If you're in the position where you are in a hurry though, you may not have that option I realise.
 
R

Rocketjump

Member
Joined
Jun 27, 2017
Messages
15
Time is the problem, the plan was to get this bond even at a high rate and then pull money out of the two residential and settle it and rather repay them at the lower rate.... but then they slapped me with the early settlement fees.

It might still be worth looking at later on, 5% penalty is doable if I will save in the long run, not sure of the other "bond breakage fees" or what those are.

Definitely been a big learning experience
 
zerocool2009

zerocool2009

Executive Member
Joined
Sep 4, 2009
Messages
8,832
Look, banks aint stupid. Lets say you apply for a bond, a property with 5 smaller properties on it (I know for a FACT FNB will laugh you off).

I know also commercial property is a big gamble
 
J

Jehosefat

Expert Member
Joined
May 8, 2012
Messages
1,766
So my offer was accepted. GREAT SUCCESS :D :D :D

Now I just need to get my place sold...

Anyone interested?
www.privateproperty.co.za

2 Bed Apartment for sale in Morningside | T3011882 | Private Property

2 Bed Apartment in Morningside, Urgent sale! This Exquisite Unit offers an open plan kitchen, formal dining room and lounge that also flows out to a private balcony. The unit further boasts 2 well sized bedrooms with the main en s...
www.privateproperty.co.za www.privateproperty.co.za
 
zerocool2009

zerocool2009

Executive Member
Joined
Sep 4, 2009
Messages
8,832
Jehosefat said:
So my offer was accepted. GREAT SUCCESS :D :D :D

Now I just need to get my place sold...

Anyone interested?
www.privateproperty.co.za

2 Bed Apartment for sale in Morningside | T3011882 | Private Property

2 Bed Apartment in Morningside, Urgent sale! This Exquisite Unit offers an open plan kitchen, formal dining room and lounge that also flows out to a private balcony. The unit further boasts 2 well sized bedrooms with the main en s...
www.privateproperty.co.za www.privateproperty.co.za
Click to expand...

And show us what did you buy ? I assume the PP listing is yours currently
 
D

Dark Agent

Expert Member
Joined
Nov 30, 2008
Messages
2,312
Got Prime plus 0.39%. 100% bond. R900000 bond.

Nedbank said no, affordability and risk.
SA Home Loans prime + 0.6% with 5% deposit.
FNB prime + 0.66% with 5% deposit
Standard Bank prime + 0.39%.
ABSA Prime plus 0.7%.

Just waiting for FNB to come back with a better rate and 100%.
 
You must log in or register to reply here.
Top