Tuesday, January 11, 2011

Do I get charged for cancelling my home loan?

So next time you want to cancel your home loan or mortgage check the small print and do not believe everything you are told.  YES you do pay unless........

So here's the lowdown - thanks to Lindy Ziyambe at financial advisers Globalfundi.

"If you are selling a property with a bond registered over the property, it must be cancelled on transfer and the seller is responsible for payment of the cancellation conveyance’s fees. ", she says.

" Take note, that a 90 days cancellation period is a prerequisite to FNB, Standard bank and Absa.  Nedbank; the 90 days period only applies to loans less than 3 years old.  If a new bond is to be registered with Nedbank then either: amended cancellation figures are issued or if bond is already cancelled, the penalty is refunded. The other 3 banks penalty cannot be waivered or refunded. Other circumstances when the 90-day notice period can be waived are deceased estates and sequestrated estates" cautions Ziyambe.

so whats the actually score here and this is what the banks say...

Well Ziyambe gives us some decent links so that we can get this information from some awesome resources:

 - Always on the button with information
also "Be wary of bank cancellations from the Property Tycoon"

and Property 24 who always have the best info available.

and stay switched on.......
 Cancelling your home loan

How do I cancel my home loan?
  • You send us instructions to cancel your home loanThe home loans department must receive a written request from you, your bank branch or attorney to cancel your home loan.
  • Complete exact cancellation figures
Your attorney is advised to attend to the cancellation of the outstanding capital amount and interest, plus any other costs that are required to settle the account.
  • Amounts included in the cancellation figures 
    • The month-end balance before cancellation figures.
    • Any home owner's insurance premiums that would have been debited to your bond account in the next three months. This ensures that the property is insured until the date of cancellation. This usually takes three months, but the process may be held up for various reasons.
    • Any life assurance premiums that would have been debited to your bond account in the next three months are included, if applicable.
    • Legal costs, interest, retention amounts and any early termination interest are all included, where applicable.
  • The bank instructs their attorney to handle the cancellationyou may nominate your own attorney to handle the transfer when a transferring attorney is involved. If the transferring attorney is on our panel, he can attend to the cancellation as well. The cancellation attorney is always nominated by the bank.
  • The title deed and bond documents are sent to the attorneyThe title deed is sent to you if the bond is paid up after cancellation. In the case of a sale, the buyer's bank receives the new title deed from the attorney.
  • The attorney issues guaranteesA guarantee is a promise to pay the stipulated amount on cancellation. Guarantees are issued to ensure that there are funds available to cover the bond on the date of cancellation. Certain attorneys will issue guarantees on our behalf.
  • The bank signs the consent for the bond to be cancelledA consent to cancellation is a document signed by the manager of home loans or, where authorized, the cancellation attorney. This document agrees to the cancellation of the bond.

    The consent to cancellation will not be signed until the banks have acceptable guarantees to cover the amount outstanding in their books.

    The attorney prepares the relevant documents, and liaises with the bank until the bond is cancelled at the Deeds Office.
  • Refunds are paid after cancellationif the banks receive more than the amount needed to repay the loan on their books they will refund you.

1 comment:

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