Taking out a bond

[jman]

Hey guys,

So two mates and I are thinking about taking out a bond together, instead of renting out. Looking to do this at the beginning of next year. We are pretty clueless about the whole process, and what would be involved. Also, what provider to use. Any advice would be appreciated.

Thanks

 

[ToxicBunny]

Don't do it.

Does their friendship matter to you more than having a place to stay? If so, then stay away from the bond idea.

 

[Marakker]

Check if you or one of your mates qualify for private banking.
Investec for example, offers an unbeatable interest rate if you meet their requirements.

If you are unable to go the private bank route, consider a bond originator such as SA Home Loans or OOBA.
They know all the ins and outs and can negotiate a better deal on your behalf.

Just a word of caution.....
It would be wise to see a lawyer and draw up a formal contract between you and your mates.
The institution granting the bond will keep all of you jointly and solely responsible for the full amount.
If one of your mates can no longer pay his/her share, the institution will expect the rest of you to pony up.

Good luck!

 

[Purply]

Ye bad idea, since all 3 of your names will be on the bond. When one pulls out and you want to remove the name, you will have to re-register the bond, which costs money and transfer duties.

 

[jman]

Hm, thanks for the advice guys. I suppose if we do go through with this, we'd have to have things in writing through a lawyer, because trust isn't enough in a case like this one. Initially, it does sound like a better idea (paying for a bond instead of rent, bond split 3 ways- cheaper), but I understand there could be problems if one person decides that he can't afford it or something. Much deliberation required. We haven't spoken much about it, just an idea for the time being

 

[ToxicBunny]

Trust me on this.. even if it sounds like a good idea now and everyone agrees etc etc, in 5 years time it won't and it will destroy the friendship..

STAY away from this idea if you value their friendship.

 

[The_Ogre]

Does the house cost too much for one of you to afford it?

If one buys it he can have the other two rent from him a rate less than the current. That's if you're really buddies.

 

[Myrrdin]

Taking out a bond is not an easy thing.
See the following links for examples of the difficulties you might experience.
http://en.wikipedia.org/wiki/Skyfall
http://en.wikipedia.org/wiki/Quantum_of_Solace
http://en.wikipedia.org/wiki/Casino_Royale_(2006_film)

So it is definitely advisable to get some buddies although that does not ensure success at all.
It is not an undertaking to be taken on by amateurs such as yourselves so I would definitely advise getting help from a professional organisation.

 

[Marakker]

 

[jman]

Taking out a bond is not an easy thing.
See the following links for examples of the difficulties you might experience.
http://en.wikipedia.org/wiki/Skyfall
http://en.wikipedia.org/wiki/Quantum_of_Solace
http://en.wikipedia.org/wiki/Casino_Royale_(2006_film)

So it is definitely advisable to get some buddies although that does not ensure success at all.
It is not an undertaking to be taken on by amateurs such as yourselves so I would definitely advise getting help from a professional organisation.

Your relevance is unrivalled

 

[heartbroken]

Does the house cost too much for one of you to afford it?

If one buys it he can have the other two rent from him a rate less than the current. That's if you're really buddies.

^ This. By the place yourself and rent out the rooms to your buddies at a discounted rate. That way they score cheap accommodation and you score a house partially paid for by someone else.

Buying jointly might seem fun and games,but it's not. A year or so down the line something's always breaks and one party has to foot the bill because the other guy spent his money on booze and hookers. Fast forward another year, now one of the buddies moves in with his girlfriend and now expects you 2 to split his part, because he is mos not staying there. Another year later, he gets married and now wants his share to buy a house with the wifey, at market value, at your cost. Not worth it man, rather live in your car. Source: true story.