A
Access Bond Facility
Gives you access to your bond, enabling you to deposit and withdraw funds from the home loan
Agreement of Sale
Contract through which property is sold
Annual Premium
Life assurance policy premium for home owner paid once annually
Attorney
The legal representation involved in the transfer of ownership of a property.
Assessment
The official valuation of the market value of property, usually done by a bank
Assessment Fee
The charge involved in getting a bank to value your property
B
Balance Sheet
Annual financial statement reflecting an individual's or company's financial position
Bearer/Seller
The individual who owns the property being sold
Bona Fide
Trusted as valid
Bond Costs
This is the cost involved in registering a bond. The costs involved include conveyancer's fees, stamp duty and vat. These costs are payable to the attorney responsible for the registration of the bond and are calculated on a sliding scale basis
Bond Registration Fee
The cost involved in registering the home loan in the buyer's name
Bond Term
The period over which the home loan is to be paid
Borrower (Mortgagor)
The individual applying for a home loan from a financial institution
Building Contract
This contract outlines the specifications of a building, and is set between the land owner and builder
Building Loan
This loan is granted to a buyer to buy a vacant plot of land to build on
Buyer's Market
This is when the property market is working in the favour of buyers. Under these conditions the seller would often be forced to sell at a lower price than the actual market value of the house
C
Capped rate
This is the prevention of the interest rate charged on home loan financing from fluctuating too erratically. This limit is usually applied to a specific period or can be extended over the entire period of the loan
Ceiling
The highest interest rate allowed on a home loan
Collateral
The security provided by borrower in order to secure a home loan, usually an asset i.e. fixed deposits, life assurance policies, shares, tradable bonds, etc.
Contract of Sale
The terms and conditions of sale made between the buyer and seller
Conveyance
The official document detailing transfer of home from seller to the buyer
Cooling off period
This allows a first time home buyer's the chance to change their minds within five day's of signing the offer to purchase a home. Usually only available for property's under R250 000
Credit Bureau
An institution holding all consumer's credit information
Credit Report
This is used by lending institutions in order to determine the credit worthiness of an individual wanting to apply for a home loan. These reports are compiled by the credit bureau's, ITC and Experian
Credit Score
A number statistically calculated in order to determine your credit worthiness, information like credit card history and bank account information are used as source information to calculate your score
D
Deed
Document detailing the transfer of ownership from one owner to another, this is delivered to the buyer at the closing of the deal
Deeds Office
Government department responsible for the administration of immovable property
Deeds Office Registration Fees
Deeds office charge for mortgage registration
Default
The failure of the borrower to make payments on a home loan
Deposit/Collateral
This is the cash provided up front which reduces the amount of money required to be lent from the bank. A deposit increases your chances of receiving financial assistance with regards to purchasing a property because the deposit shows that you have made a financial commitment towards purchasing a property. Collateral can also be provided in forms other than cash i.e. stocks, tradable bonds, life assurances, etc.
E
Estate Agent/Broker
The individual involved in the property market buying and selling homes
Equity
The amount by which the property market value exceeds the outstanding bond on that property
F
Finance Charge
The interest rate charged by the bank for borrowing the capital to finance the purchase of a property
Foreclosure/repossession
When a property is sold to defray the outstanding bond amount when defaults occurs
Freehold
The property and land on which it is built is owned by the property owner and is bond free
G
Grace Period
This period is allowed to assist the home owner by allowing a loan payment to be made after the due date without incurring a late penalty.
Gross Income
Monthly income before tax and company deductions
H
Home Loan Application
The information required by bank in order to grant a home loan to the borrower
I
Installment amount
The loan amount payable on a monthly basis, often excluding life assurance and insurance premium
Interest
The charge involved in borrowing money
Interest rate
Annual charge on a loan, expressed and calculated as a percentage of 100
J
Joint Liability
When more than one individual is liable for the full debt
K
Sorry, there are no terms explained starting with this letter.
L
Latent defect
Flaws or defects that go undetected during property inspection
Lender
The institution offering the home loan
Loan + Costs
This allows the first time home owner to borrow more than the actual price of the property
Loan-to-value Ratio (LTV)
The portion of the property price the bank is willing to lend you. It is calculated as a percentage of the value of the property to the loan amount required. Home loans of up to and exceeding 100% can be granted under certain circumstances.
M
Monthly Installments
The monthly repayment of the home loan. During the first few years most of your payments will be offset against the interest amount owing, and eventually the older the mortgage the more of the outstanding capital amount will be offset with the payment. Generally it is accepted that your monthly installment should not exceed a third of your monthly salary.
Mortgage Broker
An institution which borrows or lends money to borrowers
Mortgage or Bond
Legal agreement between the borrower and the financial institution, stating that they'll lend the borrower the finance in order to purchase a property, given that the borrower agrees to pay back the loan on a monthly basis at a predeclared interest rate
N
Notice of default
Written communication to the borrower indicating that default has occurred and that legal action is pending
O
Occupation
The date from which the buyer moves into the property
Occupational Rental
If the buyer moves in before the transfer of ownership takes place then then, the buyer is liable to pay rental to seller at an agreed amount
Offer to purchase
Document prepared by estate agent, making an official offer to the seller regarding the purchase of the property, which becomes binding when signed by all parties
P
Power of Attorney
Gives one individual the legal right to act behalf of another
Pre-Approval
This happens before the actual application process and allows the lender to assess the borrower's credit worthiness, this gives the borrower confidence to negotiate favourable interest rates with confidence
Prequalification
This gives the borrower an idea of how much the financial institution is willing to lend them
Purchase Agreement/Deed of sale
Contract signed which states the terms and conditions under which the property is sold
Q
Sorry, there are no terms explained starting with this letter.
R
Reducing/Step Down rate
This option usually applies for set period, in which your interest rate is guaranteed to decrease by set percentages for the agreed period
Registration
The transfer of ownership from the seller to the buyer via the deed of transfer
Repayment Terms
Home loan repayment period, the longer the repayment period the smaller the monthly installment will be.
S
Second Mortgage
An additional home loan secured through the ownership of a property
Sectional Title
Each individual unit in a complex block of flats sold separately, in this type title the owner of the individual unit does not have the right to extend the property.
Stamp Duty
Obligatory tax to be paid to the government when a property transfer's ownership
Short Fall
The amount by which the value of the property exceeds the loan amount granted by the bank
T
Title Deed
The document held by the owner of a bond-free property stating the conditions of ownership and a full description of the property
Transfer Fee
Fee paid to transferring attorney in order to transfer a property from the seller's name onto the buyer's name
U
Sorry, there are no terms explained starting with this letter.
V
Valuation
An approximation of the current market value of the property, usually done by bank or a knowledgeable individual in the property market
Voetstoots
This a message of caution to the buyer to ensure that they are fully aware of all conditions of the sale and that they are fully aware the condition of the property they are purchasing
W
Sorry, there are no terms explained starting with this letter.
X
Sorry, there are no terms explained starting with this letter.
Y
Sorry, there are no terms explained starting with this letter.
Z
Sorry, there are no terms explained starting with this letter.
