Winkerclan
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- Aug 24, 2014
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I have a property bonded with SA Homeloans:
Remaining bond R360 000 over the remaining term of 9 years. My property is now worth R1.4m. My interest rate is fixed at 8.5% because I am on, what is called, a Super Lo Option.
Apparently, SAHL don't offer this product any longer, but for the "lucky" few that are still on this option, the interest rate will stay at 8.5% until the bond is paid.
So when I recently spoke to SAHL about purchasing another property, they advised that since I would never get the rate of 8.5% again, I should rather refinance my current bond, take out the cash (equity) and instead use the cash towards the new property, thereby keeping the 8.5% interest rate.
It sounded great, until I went ahead and applied for the refinance, which was accepted. SAHL then advised that my new repayments for the remaining 9 years will be at 10.6%.
When I queried why I would not continue to get the 8.5% which was promised, they said it's because this would now be considered a 'new' deal. (Bear in mind it's the same bond agreement, just the amount has increased.)
They have now sent me a declaration they want me to sign before they can proceed with the refinancing. The document I must sign states:
"We hereby agree that on approval of our further lending application that the Super Lo option on our homeloan will be cancelled and that all benefits that may accrue as part for the Super Lo option will be forfeited. Such benefits include, but are not limited to, any accrued loyalty benefit amount not yet paid, or the right to pay interest at the Super Lo Rate."
"We also acknowledge that the Super Lo option cannot be re-instated if we elect not to proceed with the approved further lending application. "
"This document must be completed and signed by all bondholders. Further, we will not be able to proceed with your further loan application until this document is returned to us by faxing it to the number above."
My concerns are:
1) They seem quite desperate for me to sign this document canceling the Super Lo option, before sending me anything further to sign on the refinance.
2) Why do they say "the Super Lo option cannot be re-instated if we elect not to proceed …" Does this mean if I decide not to proceed with the refinancing, that my current bond is going to jump from 8.5% to 10.6%?
It feels like they are looking for any way they can to get out of the 8.5% deal I have with them.
Does this all seem correct? I'm rather skeptical, especially knowing that agents earn commission for new deals that they do.
Remaining bond R360 000 over the remaining term of 9 years. My property is now worth R1.4m. My interest rate is fixed at 8.5% because I am on, what is called, a Super Lo Option.
Apparently, SAHL don't offer this product any longer, but for the "lucky" few that are still on this option, the interest rate will stay at 8.5% until the bond is paid.
So when I recently spoke to SAHL about purchasing another property, they advised that since I would never get the rate of 8.5% again, I should rather refinance my current bond, take out the cash (equity) and instead use the cash towards the new property, thereby keeping the 8.5% interest rate.
It sounded great, until I went ahead and applied for the refinance, which was accepted. SAHL then advised that my new repayments for the remaining 9 years will be at 10.6%.
When I queried why I would not continue to get the 8.5% which was promised, they said it's because this would now be considered a 'new' deal. (Bear in mind it's the same bond agreement, just the amount has increased.)
They have now sent me a declaration they want me to sign before they can proceed with the refinancing. The document I must sign states:
"We hereby agree that on approval of our further lending application that the Super Lo option on our homeloan will be cancelled and that all benefits that may accrue as part for the Super Lo option will be forfeited. Such benefits include, but are not limited to, any accrued loyalty benefit amount not yet paid, or the right to pay interest at the Super Lo Rate."
"We also acknowledge that the Super Lo option cannot be re-instated if we elect not to proceed with the approved further lending application. "
"This document must be completed and signed by all bondholders. Further, we will not be able to proceed with your further loan application until this document is returned to us by faxing it to the number above."
My concerns are:
1) They seem quite desperate for me to sign this document canceling the Super Lo option, before sending me anything further to sign on the refinance.
2) Why do they say "the Super Lo option cannot be re-instated if we elect not to proceed …" Does this mean if I decide not to proceed with the refinancing, that my current bond is going to jump from 8.5% to 10.6%?
It feels like they are looking for any way they can to get out of the 8.5% deal I have with them.
Does this all seem correct? I'm rather skeptical, especially knowing that agents earn commission for new deals that they do.
