Cancelation of Morgage Bond

Once your home A sum of borrowed money (principal) that is generally repaid with interest. Afrikaans - Lening

">loan is fully paid, you may have the An offer made to a person coupled with an undertaking by the person making the offer not to revoke his offer for a specific period. Afrikaans - Opsie

">option of keeping the bond facility available to you. This is important if you need to borrow more money in future. You will not have to incur bond registration costs again in the future (on the same property in question), as you will not need to register a further bond over the property. You may also keep your Homeowner's Insurance and Life Assurance Policies. You will obviously still have a small monthly payment to make, i.e. Administration Fee, Homeowner's Insurance and Life Assurance.

The process:

You give the bank (or the This attorney attends to the cancellation of the seller’s bond and is appointed by the bank, which holds the current mortgage bond.  Afrikaans - Verband Kanselasie Prokureur

">cancellation attorney, who advises and is chosen by the bank) a written request to cancel your home loan. The bank will require that you give a 90 Day (3 month) Early Settlement Notice. If you do not comply with this notice period, you may need to pay a finance charge. The only instances where the notice period may be waived are in the case of:

- A deceased estate;
- A When a creditor seizes assets to recover unpaid debt. Afrikaans - Gesekwestreer

">sequestrated estate;
- Bonds where you can provide evidence that your new bond will be with that same bank.

The bank instructs the cancellation attorney to tend to the cancellation, giving the attorney the exact cancellation figure, which includes:

- The month-end balance prior to Outstanding amount on the mortgage, interest and any other costs required to settle the mortgage bond. Afrikaans - Kanselasie Syfers

">cancellation figures being issued;
- 90 Days interest.
- The homeowner's insurance premiums that would have been debited to the bond account in the next 6 months, to ensure that the property is covered until transfer takes place.
- The life assurance premiums that would have been debited to the bond account in the next 6 months, to ensure that you are covered until transfer takes place.
- All the legal costs, interest and/or early settlement charges.

The bank furnishes the buyer's bank (who now holds the new bond) with the A document that gives evidence of an individual's ownership of property. It includes the following information about the property: names of the current and previous owners; a full description including it’s square meterage; the purchase price paid by the existing owner; all conditions restricting the use; and all limited real rights registered. Afrikaans - Titelakte

">title deed, once the bond is paid up after cancellation.

A Guarantee A formal letter issued by a financial institution to the transferring attorney, undertaking to pay the purchase price (or outstanding amount) on registration of transfer of the property into the name of the buyer. Afrikaans - Waarborg

">guarantee (promise) is issued, by the This attorney attends to the registration of the new bond into the name of the buyer. Afrikaans - Registreerde Prokureur

">registering attorney to your bank, that there are sufficient funds available to cover the bond on the date of cancellation.
The bank issues the consent to cancellation.
If the bank receives more than the amount needed to repay your home loan, it will refund you.

Early Settlement...

If you cancel the home loan, once paid in full, the bank must give you the property's Title Deed it holds as well as any other Collateral for the bank that a client pledges in case they default on their mortgage payment. Afrikaans - Sekuriteit

">security documentation. Remember that you will pay a 'Bond Cancellation Fee' to the attorneys to cancel your home loan. Click here to read more about Title Deeds.

If you cancel the home loan, due to the sale of your property, while still owing on the bond, you have to notify the bank in writing at least 90 days (3 months) in advance. You will also need to stipulate to the bank how you intend to repay the outstanding amount, i.e. with the proceeds from the sale of your home. If you need to cancel the bond with less than the 3 months notice, you may be liable for The interest charged on a loan. Afrikaans - Finansieringskoste 

">finance charges. Some banks may waiver the 3-month notice period if you refinance your new property with them. For more information on this, contact your banker/financial adviser.