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A Step-By-Step Guide To Transferring Your Home Bond

Oct 31, 2024 | Property

We wish that all things in life were as simple as signing on the dotted line and that being the end of the story. Unfortunately, that is rarely the case, particularly when it comes to buying or selling a home. One example that requires careful attention is when you are transferring a bond.  

Whether you are transferring your bond due to selling your property, a change in personal circumstances such as a divorce, or refinancing your home loan, understanding the step-by-step process will help you navigate this procedure with confidence. More importantly, having a firm grasp on the ins and outs could prevent you from landing up with unnecessary expenses or encountering legal issues later on. 

Let’s unpack what to transferring a bond for the average South African means.  

Step 1: Inform Your Lender 

The first step in transferring your bond is potentially the easiest, in that all you need to do is notify your lender that you wish to do so. If you are the seller, you’ll need to first inform the bank of the sale and put in a request to cancel the bond on the property. In fact, even if you’re simply refinancing or transferring your bond to another bank, you’ll need to notify the bank first.  

At this stage, keep in mind that the lender, whether it be a bank or some other financial institution, might charge a bond cancellation fee. This isn’t a standard amount and typically ranges from R3,000 to R5,000. 

Step 2: Engage With Conveyancers 

Now it’s time to get legal. For this step, you need to involve the conveyancers, who are attorneys specialising in property law. Both the buyer and seller will have separate conveyancers. If you are the buyer, and your offer to purchase has been accepted, your conveyancer will initiate the bond transfer process and make sure that all your legal requirements are met. This includes drafting all the necessary documents, as well as ensuring compliance with the Deeds Office, and securing payments for transfer duties. 

Step 3: Obtain A Settlement Figure 

In this step, you’ll go back to the bank responsible for the existing home loan to get the settlement figure. The settlement figure is simply the outstanding amount on the bond and tends to include any additional costs, like that early bond cancellation fee we mentioned.  

If you are the homeowner, then please note that you must provide 90 days’ notice to your lender if you intend to settle the bond. If you don’t do this within this timeframe, you could end up paying additional interest charges. 

Step 4: Bond Registration (New Lender) 

Let’s say that you are transferring a bond to another lender. In this case, the new bank will need to register the bond at the Deeds Office, which is vital as it ensures that the bond is officially recorded against the property title. It’s also during this step that a new loan agreement will be drawn up, outlining the terms and conditions of the bond, including interest rates and repayment periods. 

Step 5: Pay Transfer Fees And Costs 

We have now arrived at the step where payments are required. These may include bond cancellation fees, transfer duty (a tax payable to SARS), bond registration fees, and conveyancer fees. If you’re wondering how these are calculated, we can tell you that transfer duties are based on the property’s purchase price, while bond registration fees are determined by the value of the bond.  

Step 6: Transfer of Property Ownership 

This is more or less the final step. Once all the documents have been signed, and payments have been made, all that is usually required is the transfer of ownership at the Deeds Office. This process usually takes about two to three weeks and after the transfer is complete, Title Deed is complete, and the bond transfer process will be finalised. 

Feeling Informed? 

We understand that transferring a bond can be a complex and sometimes expensive process, however, understanding each step can help you prepare and avoid unexpected surprises.  

Our parting advice is for you to choose experienced conveyancers you can trust, to keep communication open with your lender, and start budgeting for all the fees coming your way.  

Don’t forget that AA Inform offers a variety of property tools and resources, including our home affordability calculator and free property valuation reports. Tools like these can help you to assess your home’s worth accurately and get true insights into properties of interest to you.

We offer a variety of property tools and resources, including our home affordability calculator and free property valuation reports. Tools like these can help you to assess your home’s worth accurately and get true insights into properties of interest to you.  closer look at these tools.

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