Costs and expenses
When buying a property, there’s additional costs that you have to take into consideration beforehand.
- The deposit
The bank has the right to ask you to pay a deposit. The bigger the deposit you can put down, the smaller the home loan you will have to take and the less interest you will have to pay.
- Initiation fee
This is the charge to prepare the documents and process your loan application. The bank normally notes it in the quotation letter they’ll send you once your application has been approved. It’s a few thousand Rand which get loaded onto your bond.
- Service fee
The bank will charge a monthly service fee on your home loan. This should also be noted in the quotation letter.
- Transfer fees
A lawyer prepares the document to transfer the title deed for the property from the seller’s name to your name. As the buyer of the property, you pay the transfer fees upfront. These are calculated on the buying price. No transfer duty is payable for loans up to R600 000, but the transferring attorney’s fee will still apply. The transferring attorney will advise you of the amount that you will need to pay (you can click on the links below to view the fee structures of our reccommended attorneys). These fees must be paid before registration and banks no longer include it in the bond. You do not need to pay transfer fees if you
are buying a property in a new development (off-plan) or if you are applying for a loan to build a new house.
- Bond registration fees
The lawyer appointed by the bank, called a conveyancer, will prepare the bond registration documents so that the bond is registered in your name. They will send these documents to the Deeds Office where ownership details of every single property in that area is filed. The charge for this called a bond registration fee (you can click on the links below to view the fee structures of our reccommended attorneys). You (the buyer) are responsible for bond registration fees before registration, and it’s also not allowed to include it in your bond.
- Home-owner’s insurance
Home-owner’s insurance covers damage to the structure of your house. The insurance protects you and us against any losses if your house is damaged or destroyed and it is therefore compulsory. For example, if your house catches fire or is damaged by floods, this insurance helps to pay for the repairs. It does not cover damage to the house caused by lack of maintenance or the furniture inside the house. You can use the insurance cover recommended by the bank or you can go to an insurance company of your choice. This applies to free-standing properties. If you are buying a sectional title property, the body corporate will arrange this cover through an insurance company of its choice, which will be included in your levy. Please refer to your policy to understand what is covered. If you take a policy from the bank, the monthly premium will be included in your monthly debit order.