Taking out a bond

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DrewChan

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Who are the best bond originators, or should I just approach bank directly? GF and I are looking at combining income and buying a small investment apartment that I will either live in or we will rent out.

Is there anything I should know about going into a bond with someone that I am not married or related to.

First bond so want to know everything.
 
Bond in itself is a contract between you two so if it's 50/50 there's no real problem.

Just remember that she is equally responsible so if she defaults on her side of the payment YOU are defaulting as well technically and they come after both of you.

You can't decide to pay your half and she decides to skip a month for instance.

I had good experiences with Ooba before but I would say also go directly to your own bank as well.

Also have you got cash in pocket for transfer costs and bond fees?
 
Well have 25kish lying around but might save a bit more.

Looking at buying in the 600 - 800 price range so nothing too expensive
 
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My advice, have a look on the forum here, there are quite a few threads asking a similar question to what you are.
Basically, its a 50/50 equal split. Make sure that you can cover the other person's portion in the event that something goes wrong/they default/become unemployed or any other event.

Try save up a little more to cover transfer costs and bond registration. The price region you looking in is mostly exempt from transfer costs, but there will still be attorneys fees and bond registration fees. Save up for that.

You may also need to save anywhere from 5% to 30% of the purchase price for a deposit, depending on the lending institution, your credit / risk profiles as well as the property profile.

I'd suggest approach the banks & SA Home Loans directly. I've had bad experiences with bond originators and then went on to have better luck with the banks themselves.

Renting out the property comes with it's own set of potential headaches but also it's fixed costs. Make sure you know these and can afford them before purchasing the property.

Good luck!
 
snowwolf said:
My advice, have a look on the forum here, there are quite a few threads asking a similar question to what you are.
Basically, its a 50/50 equal split. Make sure that you can cover the other person's portion in the event that something goes wrong/they default/become unemployed or any other event.

Try save up a little more to cover transfer costs and bond registration. The price region you looking in is mostly exempt from transfer costs, but there will still be attorneys fees and bond registration fees. Save up for that.

You may also need to save anywhere from 5% to 30% of the purchase price for a deposit, depending on the lending institution, your credit / risk profiles as well as the property profile.

I'd suggest approach the banks & SA Home Loans directly. I've had bad experiences with bond originators and then went on to have better luck with the banks themselves.

Renting out the property comes with it's own set of potential headaches but also it's fixed costs. Make sure you know these and can afford them before purchasing the property.

Good luck!
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Thanks for such a detailed reply, will take that all into account
 
Generally its a bad idea to take one out with a partner that you arent married to.
I have seen a few friends do that and when the relationship went south the properties ended up getting repo'd.
If you are cool with having to pay her portion if she decides not to then its not too bad.
 
Rocket-Boy said:
Generally its a bad idea to take one out with a partner that you arent married to.
I have seen a few friends do that and when the relationship went south the properties ended up getting repo'd.
If you are cool with having to pay her portion if she decides not to then its not too bad.
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Yup, if the other person bails and you need to get the house onto your name, you need to open another bond, pay transfer and legal fees as well as a new deposit on the bond. Nothing a 100k or so cannot fix <personal experience>

Anyway, snowwolf gave solid advice, nothing more to add. Save up a bit more for a 600k house, I would say save up about 100k. Approach banks directly, I only had bad experiences with originators.
 
Firstly ... no issues with a joint bond. Thats how my now wife and I got our first home.

Secondly - shop around.

The banks will give you differing rates and options.
Consider fixed interest rates as opposed to market related and ask when and how to fix these.
You may need some insurance cover on the bond, and dont need to take the banks policy.
If units being transferred, then expect transfer fees
And expect a few thousand Rand for a bond initiation.
Ask about the term and early settlement
 
DrewChan said:
Well have 25kish lying around but might save a bit more.

Looking at buying in the 600 - 800 price range so nothing too expensive
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This is not enough. You'll need a deposit that's around 10% of the value of the property (maybe you can get away with less depending on your profile and the area, but don't bet on it).

Then you've got the barrage of fees that include transfer costs (the first R600,000 of a property is exempt IIRC), bond registration (PLEASE don't finance this as part of you bond) and attorney fees and the like which can easily swallow that R25K of yours (once again this depends on a few factors).

Also my advice - don't purchase at your limit (i.e. you qualify for a R650,000 bond so you get a R650,000 bond). Rather go in slightly under your maximum affordability and then make extra payments into the bond every month, a much better bet in the long term.
 
I.am.Sam said:
also have money for renovations and stuff

Hello the stranger been a while ...dad
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Hello my son, glad to see you are still around. You never call anymore, you never visit anymore, it's like the only thing of value I can offer you is food. :(
 
Probably the best way to take out a Bond... It nearly worked.

8141549.jpg
 
TehStranger said:
This is not enough. You'll need a deposit that's around 10% of the value of the property (maybe you can get away with less depending on your profile and the area, but don't bet on it).

Then you've got the barrage of fees that include transfer costs (the first R600,000 of a property is exempt IIRC), bond registration (PLEASE don't finance this as part of you bond) and attorney fees and the like which can easily swallow that R25K of yours (once again this depends on a few factors).

Also my advice - don't purchase at your limit (i.e. you qualify for a R650,000 bond so you get a R650,000 bond). Rather go in slightly under your maximum affordability and then make extra payments into the bond every month, a much better bet in the long term.
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^ This

Bought a house in 2010 for R900k, all the fees came to about R80k. This didn't include deposit of 10% (R90k) to get the bond.
Make sure you have all the different costs planned and mapped out and then make sure you have a whole lot more in case of problems or unexpected fees/delays. Nothing worse than forking out tens of thousands just to wind up losing everything because you failed to plan correctly.

Rather get the bond in your name and right out a contract that 50% of the property belongs to your GF while monthly payments are being paid or you only owe her her financial contributions up to the point of non payment. At least this way when things go tits up you can:
a) sell the property without emotions/tempers coming into it and ruining the process of selling the property
b) you only owe her the amount she contributed
c) if you can at a later stage cover the bond yourself and manage to pay her off go that route.

It's always nice to think people will be together forever but it paves the way for very bad financial situations and sometimes even bankruptcy. Yes you can get a bond together if that's what you want but rather sit down and be honest with each other. If you're in a good relationship now you shouldn't have a problem sitting down and discussing openly what the pitfalls of a big financial commitment are if your relationship doesn't work out - and don't for a minute think that someone you love and adore wouldn't act irrationally if the relationship fails - some people go so far as to sink themselves just to sink others.
 
Agent_Smith said:
Probably the best way to take out a Bond... It nearly worked.

View attachment 211458
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Preview
 
+1 for advice against buying joint property with girlfriend. Trust me, from personal experience.
 
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