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 Ask The Experts

Q

Jack Serabo of Woodstock asks: We are buying a house for R880 000. Now, after we’ve signed the bond, they want R19 000 cash – yet we took out a bond because we don’t have that kind of money lying around. No one told us this beforehand. Is this normal practice?

A

SAUL GEFFEN replies: Based on the information given, I suspect that this sum is related to conveyancing costs, which include transfer and registration costs – part of the total costs of buying a home. Usually, transfer and registration costs equate to about eight per cent of the value of a property.
 These are mandatory fees which are required to ensure the transfer of the property into your name via the deeds office, and the registration of the bond.

It is possible to negotiate these costs with the legal firm you use or via your mortgage originator and, in some cases, you can apply for a 108 per cent bond from your bank – in which case the additional funds borrowed are used to cover these costs. In this way you can avoid any unexpected cash outlay.

There are also other costs associated with buying a new home, such as homeowners insurance (on the structure itself), moving costs, and changes you might need to make to your short-term insurance cover.

Your experience underlines the importance of getting the assistance of a professional such as a reputable mortgage originator when you are buying a house.

A mortgage originator can help you to identify all the costs associated with the transaction and to assess the impact of your purchase on your financial well-being.




Saul Geffen, MortgageSA, 086 001 2360, www.mortgagesa.co.za