Buying a Home? Understanding the Bond Registration Process and Obtaining a Home Loan

You have signed an Offer to Purchase or have a Sale Agreement in place, and now you need to fulfill the suspensive condition requiring that you obtain mortgage bond approval within a stipulated time period.

A mortgage bond is a loan that you borrow from a bank/lender to finance the purchase of a property, and it is registered in the Deeds Office against the property in question.

You can apply to the bank/lender directly or contact a Mortgage Originator who will do this for you and find the best rate on your behalf. Have all your FICA documents, a copy of the signed Sale Agreement, and your bank statements and payslips ready for the bond application process.

Your financial situation, income, and credit history will be assessed to determine whether the loan will be approved and the amount that the bank/lender is willing to lend you.

The bank/lender may also evaluate the property to ensure its value matches the loan amount and to assess its condition.

Once you have obtained bond approval and accepted it, the bank/lender will send an instruction to register the bond directly to conveyancers on their panel who are located in the area where you reside.

This instruction will contain the terms and conditions of the mortgage bond as per the bond approval, including the loan amount, any future use amount you may have been provided with, the interest rate, repayment period, and any other applicable conditions.

The conveyancers who receive the bond instruction will then contact you to confirm receipt of the instruction and to request the documents required by the bank/lender and necessary for drafting their bond documents.

Bear in mind that if a bond is registered over the property, you will also be required to pay the bond registration costs (as well as the transfer costs as the purchaser), so plan your finances accordingly to make provision for this.

The conveyancers handling the bond registration will communicate with the conveyancers handling the property transfer to obtain a copy of the title deed and the guarantee requirements.

The bond documents will then be prepared, and you will be requested to come in and sign them (allow at least 45 minutes for this appointment as the documents to be signed can be extensive!).

The conveyancer will then upload all the signed and requested documents to the bank for their approval. If approved, the bank/lender will provide a "Proceed to lodge" instruction, and the conveyancers involved will arrange to lodge and register all the related transactions simultaneously in the Deeds Office.

After registration, the Title Deed of the property will be sent to the relevant bank/lender until you have made all the bond repayments and the bond has been cancelled.

As conveyancers, we have strict requirements to adhere to in terms of turnaround times and the quality of documents, as per the Service Level Agreements entered into with the banks.

Duvenage Incorporated is on the bank panels of ABSA, Standard Bank, FNB, and Nedbank. Contact us for all your bond and bond cancellation queries.