Owning Property and Paying a Bond
If you want to purchase property, whether for a business or home, you do so by taking out a bond. A bond is more commonly referred to as mortgage. It's rare that an individual will have ample enough funds to purchase a property straight-up. So the individual must borrow from the bank.
Banks are in business to lend money, so bonds have always represented a primary service they offer. Holding a mortgage is a way the bank will make a long term profit, because they not only receive money from the individual but also hold the deeds to the property until the loan is repaid in full.
The bank holds stipulations for individuals wishing to purchase property. For example, the individual must put down a cash deposit against the purchase of property. Generally the buyer must meet a minimum of 30% of what the property is worth.
The recent mortgage disaster stems from banks becoming way too lenient in the way they do business, reducing those restrictions sometimes entirely. Unfortunately too many people got over their heads in debt and have ruined the bond process for everyone else.
When considering such a request, the bank will follow the procedures that they would do when granting a new mortgage, but with one or two minor differences. If you plan on renovating your current property and just need help via a loan, the bank will request you submit estimates from professional contractors. Banks are much more inclined to grant the money if professionals will work on the renovation and not yourself.
After you provide the bank with all the details, they will sit down and study your case. The bank needs to decide if you really need the money and if you will be able to pay it off. It's difficult paying off one bond much less two.
Banks who issue bonds are entitled to ask for banks statements and details of income of both parties in the case of a joint bond against a property. You have no option here. While you may not like disclosing your personal information, the bank must closely examine and judge whether or not you can afford the bond.
Purchasing and owning property is an experience and right everyone should enjoy. However, it's also a time filled with doubt and concern. Do your homework and make sure you can afford the bond both now and in the future.
Banks are in business to lend money, so bonds have always represented a primary service they offer. Holding a mortgage is a way the bank will make a long term profit, because they not only receive money from the individual but also hold the deeds to the property until the loan is repaid in full.
The bank holds stipulations for individuals wishing to purchase property. For example, the individual must put down a cash deposit against the purchase of property. Generally the buyer must meet a minimum of 30% of what the property is worth.
The recent mortgage disaster stems from banks becoming way too lenient in the way they do business, reducing those restrictions sometimes entirely. Unfortunately too many people got over their heads in debt and have ruined the bond process for everyone else.
When considering such a request, the bank will follow the procedures that they would do when granting a new mortgage, but with one or two minor differences. If you plan on renovating your current property and just need help via a loan, the bank will request you submit estimates from professional contractors. Banks are much more inclined to grant the money if professionals will work on the renovation and not yourself.
After you provide the bank with all the details, they will sit down and study your case. The bank needs to decide if you really need the money and if you will be able to pay it off. It's difficult paying off one bond much less two.
Banks who issue bonds are entitled to ask for banks statements and details of income of both parties in the case of a joint bond against a property. You have no option here. While you may not like disclosing your personal information, the bank must closely examine and judge whether or not you can afford the bond.
Purchasing and owning property is an experience and right everyone should enjoy. However, it's also a time filled with doubt and concern. Do your homework and make sure you can afford the bond both now and in the future.
About the Author:
Graham McKenzie is the content syndication manager at BondCredit.co.za South Africans leading Bond Originator
posted by Credit Counseling at
11:40 AM
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