Renovations Bond

[I.am.Sam]

Hello all,

dont know if there is a thread or not

So i want to renovate my parents place and add a seperate entrance as well.

The property is on my dads name

Can i get a bond to do that ?

Is the interest and terms the same as you would get when buying a property ?

 

[zerocool2009]

Hello all,

dont know if there is a thread or not

So i want to renovate my parents place and add a seperate entrance as well.

The property is on my dads name

Can i get a bond to do that ?

Is the interest and terms the same as you would get when buying a property ?

I doubt it. Personal loan plan B

 

[pinball wizard]

Hello all,

dont know if there is a thread or not

So i want to renovate my parents place and add a seperate entrance as well.

The property is on my dads name

Can i get a bond to do that ?

Is the interest and terms the same as you would get when buying a property ?

Your dad can happily apply for a bond.

You may not.

 

[newby_investor]

Your dad can happily apply for a bond.

You may not.

This. The title holder of the house can re-mortgage it, but there'd be lawyers involved of course and that means fees.

Depending on how extensively you want to renovate, it may be better to go e.g. the personal loan route, though interest will be more on something like that.

 

[zerocool2009]

If you extend any bond, as in change it (legal fees etc)

Cash is king in this example

 

[Messugga]

Hello all,

dont know if there is a thread or not

So i want to renovate my parents place and add a seperate entrance as well.

The property is on my dads name

Can i get a bond to do that ?

Is the interest and terms the same as you would get when buying a property ?

As the others have said, your dad can. Some banks would be willing to have a look at it but you'll have to put up some collateral other than the house. That's where most banks aren't likely to touch it.

 

[I.am.Sam]

thanks all, yeah not touching a personal loan

the amount would be around 800k and dont have that cash

Would i need to transfer to my name 1st before applying for a bond ?

I have a flat thats bonded, will they give me so much for "renovations"

and do they check what the money was used for ?

 

[I.am.Sam]

As the others have said, your dad can. Some banks would be willing to have a look at it but you'll have to put up some collateral other than the house. That's where most banks aren't likely to touch it.

yeah i will use my current flat as collateral

 

[newby_investor]

I have a flat thats bonded, will they give me so much for "renovations"

and do they check what the money was used for ?

You can have a second bond on your flat. If the "equity" is available, that is.

Say your property is valued at R1M, but you still owe R200k on the bond, then you have R800k equity. You can get a second mortgage on that. But you'd need to pay the same bond initiation fee, and you'd have to pay double the fee to close the bond off once you finish paying it. Subject to the usual credit checks and whatever.

I don't think they do check what you use it on in this case. You could spend it on hookers and blow, but I stand under correction.

 

[zerocool2009]

If you extend any bond, as in change it (legal fees etc)

Cash is king in this example

 

[Rocket-Boy]

thanks all, yeah not touching a personal loan

the amount would be around 800k and dont have that cash

Would i need to transfer to my name 1st before applying for a bond ?

I have a flat thats bonded, will they give me so much for "renovations"

and do they check what the money was used for ?

It depends, if you have an access bond with funds available then you can withdraw them for whatever you like.
My father in law does that whenever he wants to buy a new car, just takes the money out of the bond and pays cash.

 

[Messugga]

You can have a second bond on your flat. If the "equity" is available, that is.

Say your property is valued at R1M, but you still owe R200k on the bond, then you have R800k equity. You can get a second mortgage on that. But you'd need to pay the same bond initiation fee, and you'd have to pay double the fee to close the bond off once you finish paying it. Subject to the usual credit checks and whatever.

I don't think they do check what you use it on in this case. You could spend it on hookers and blow, but I stand under correction.

Depends. Currently our credit guys definitely want to know what you're going to do with the money, capital flight being an issue amd all.

 

[bchip]

thanks all, yeah not touching a personal loan

the amount would be around 800k and dont have that cash

Would i need to transfer to my name 1st before applying for a bond ?

I have a flat thats bonded, will they give me so much for "renovations"

and do they check what the money was used for ?

Be very careful with how much you use to renovate.
Most renovations dont return the value that people invest....ie people renovate for 500k and expect to sell the house for 500k more.
They add items like a braai area, garden feature or a pool and expect that it raises the house's value but it doesnt.

People compare square size, land erf, bedrooms and bathrooms. Thats it.
If your not changing any of these items its money that you probably wont recover for a long time.
Compare your current property to whats similar on those metrics in your area.

SA property is not in a sellers market where even items like expensive furbishing make a difference.

 

[I.am.Sam]

Be very careful with how much you use to renovate.
Most renovations dont return the value that people invest....ie people renovate for 500k and expect to sell the house for 500k more.
They add items like a braai area, garden feature or a pool and expect that it raises the house's value but it doesnt.

People compare square size, land erf, bedrooms and bathrooms. Thats it.
If your not changing any of these items its money that you probably wont recover for a long time.
Compare your current property to whats similar on those metrics in your area.

SA property is not in a sellers market where even items like expensive furbishing make a difference.

Yeah true, the upgrades wont be to sell but more to give it a newer look and feel

 

[I.am.Sam]

It depends, if you have an access bond with funds available then you can withdraw them for whatever you like.
My father in law does that whenever he wants to buy a new car, just takes the money out of the bond and pays cash.

I do have an access bond but not so much is available as my bond for the flat was way less compared to the new bond

 

[pinball wizard]

thanks all, yeah not touching a personal loan

the amount would be around 800k and dont have that cash

Would i need to transfer to my name 1st before applying for a bond ?

I have a flat thats bonded, will they give me so much for "renovations"

and do they check what the money was used for ?

Depends on what the value of the flat is.

And the might check what the money is for, but that will depend on the loan to value ratio.

 

[pinball wizard]

I do have an access bond but not so much is available as my bond for the flat was way less compared to the new bond

Then you've answered your own question. The bank will not bond the property (flat) for more than it is worth.

 

[zerocool2009]

Yeah true, the upgrades wont be to sell but more to give it a newer look and feel

2 things sells a house! Kitchens and bathrooms!

 

[F1 Fan]

thanks all, yeah not touching a personal loan

the amount would be around 800k and dont have that cash

Would i need to transfer to my name 1st before applying for a bond ?

I have a flat thats bonded, will they give me so much for "renovations"

and do they check what the money was used for ?

You could transfer to your name, but then depending on the property price, you going to be liable to pay trasnfer duty.

 

[I.am.Sam]

You could transfer to your name, but then depending on the property price, you going to be liable to pay trasnfer duty.

is the property transfer duty based on the selling price or the price valued by the city?