A

AccessBond

This facility allows you to draw funds up to a predetermined loan amount.

Administration fee

This is a monthly fee charged to cover the cost of maintaining your home loan

account on the bank’s system.

Alienation of Land Act

This law describes a property sale whereby the property is transferred into the     buyer’s name at a later date. It is used mainly for customers who do not qualify for

a home loan.

Amount limit

This is the limit up to which you may transfer funds from your home loan account to

another linked account via electronic facilities.

Annual premium

This is the premium payable once a year in respect of a life assurance or a home

owner’s insurance policy.

Assessment

This is the bank’s assessed value of the property.

Assessment fee

This fee pays for the administration work that accompanies a property assessment.

Authority to pay

This is a document whereby you authorise the bank to make payments out of your

home loan account. It forms the basis from which guarantees are issued.

Available balance

This is the difference between the balance and the ATM limit, or the balance and

the balance limit.

B

Balance

This is the balance reflected on the statement when the enquiry is taken and

excludes accrued interest.

Bond costs

These are the conveyancer’s fees, stamp duty and VAT.  They are payable by the   buyer to the attorney attending to the registration of the bond on behalf of the bank. Conveyancing fees and stamp duty are calculated on a sliding scale based on the

bond registered.

Bond term

This is the original term of the loan.

Borehole certificate

This is a certificate issued by a specialist borehole contractor stating that the borehole yields a certain amount of litres per hour. These certificates are usually

only required on agricultural holdings.

Building loan

This is a loan applied for to build a house.

C

Cancellation figures

The bank advises the attorney of these figures. They comprise the outstanding    capital amount and interest, plus any other costs required to settle the account in

the bank’s books.

Cession

This is a customer’s policy that is ceded to the bank. The bank would hold the

cession, while your insurance company would retain the policy document.

Clearance certificate

This certificate is required from the engineer where reinforced concrete is being

used.

Collateral

This is the amount of security provided to secure the home loan.

Consolidation

This occurs where the customer owns two properties next to each other and would     like them joined into one property. A new property description will be given and will

be depicted on a Surveyor General Diagram.

Contract price

This is a fixed amount of what a contractor quotes to complete a house according

to the plans supplied to him, with possible escalation built in.

Cooling-off period

This clause is included in an offer to purchase a property under R250 000. It is   based on a new law allowing first time home buyers the opportunity to change their

minds within five days of signing the offer.

D

Damp proofing certificate

This is a clearance report on the work carried out by a specialist damp proofing contractor, stating that the problem has been solved and that it will not occur again

within a specified time.

Deed Office Registration

Fees

This is a government department whose task it is to attend to the registration of

transfers of immovable property.

Deposit

This is the amount the customer has available to put towards the purchase of the

property as a guarantee.

Domicile branch

This is the branch where the customer’s home loan account is held.

Domicilium Citandi et

Executandi

This is a physical address where the delivery of legal notice will be accepted by a

party to a written agreement.

E

Electrical Compliance

Certificate

This certificate is issued by an electrician and registered with the local authority to

verify that the electrical installation of the property complies with local by-laws.

Equity

This is the amount by which the value of a bonded property exceeds the amount

owing on the loan.

Estate Agent Introductory

Commission

This commission is paid by the bank to estate agencies for introducing home loan

business to the bank.

Estimated cost

This is what the bank’s assessors feel the house would cost to build, based on

prevailing building costs.

Exposure of a complex

This indicates the number of units bonded to a bank as a percentage of the total

number of units in the complex.

Expropriation

This is where the local authority needs a portion or the entire property for its use. The bank would require a letter from the customer and the local authority, and an

assessment has to be done on the remaining security.

F

Finance charge

This is the interest charged on the loan.

Fixed interest rate

This is when your home loan interest rate is fixed for a specified period.

Freehold

This is when you own the property as well as the land it is built on.

Further advance

This is when you register a further bond over the property in order to obtain

additional funds.

H

Home Loan Pledge

This is a certificate you receive from the bank before you start house hunting, that details how much the bank is prepared to lend you. It is subject to normal credit

criteria and a satisfactory assessment of the property.

Home Loan Protection Policy

This policy is used to cover the outstanding balance on your home loan account, where capital is repaid via normal instalments in the event of death, disability,

retrenchment or dread disease.

Home Owner’s Comprehensive

Insurance

This policy provides cover for certain loss or damages to the property. These are specified in the policy document.

I

Initiation fee

This is a once-off fee allowed in terms of the Usury Act to offset the cost of opening

the account.

Instalment amount

This is the basic monthly instalment amount payable on the home loan, excluding

insurance or assurance premiums, where applicable.

Instalment status

This is the status of the account, which is the difference between the balance and

the balance limit.

Interest accrued

This is the interest accrued on the daily balance outstanding – from the first day of

the current month, up to the day before the enquiry was taken.

Interim interest

Once funds are paid out of the home loan account, interest is calculated on a daily basis on the outstanding balance. The interest is debited to the home loan account    at month-end. (The longer it takes to complete the building, the less money is

available in the account).

L

Latent defect

This is a fault or flaw that is not immediately detectable, or is hidden from view on

inspection of the property.

Leasehold

The township developer or local authority owns the property but grants leasehold

rights.

Levy

This is the owner’s proportionate share of the costs incurred by the complex for the

month.

Lodgement

This is when bond documents are presented at the Deeds Office for checking by

officials before registration of the bond.

Loan to value

This is the percentage the bank is willing to lend you, expressed as a percentage of

the bank’s estimated value of the property and the loan amount required.

M

Mandate

This is an agreement between the seller and the estate agent to market the

property.

Mortgage bond

This is an agreement between you and the bank, stating that the bank will lend you    a certain amount of money in the form of a home loan, and that you will pay the

bank back over a certain period, on a monthly basis, and at a certain interest rate.

N

NHBRC

The National Home Builders Registration Council ensures that builders extend their

commitment to customers by providing a five-year warranty.

Non-resident

This is a person whose normal place of domicile is outside the common monetary

area (outside South Africa).

Notarial Tie Agreement

This is similar to a consolidation, but the property description does not change.

O

Occupation

This is the date the buyer moves into the property.

Occupation rent

This is paid by the buyer to the seller at an agreed amount, if the buyer decides to

move into the property before transfer of ownership takes place.

Offer to Purchase

This is an offer in writing from the buyer to the seller, which is usually prepared by  the estate agent. Once signed by all parties it becomes a legal and binding contract

between the seller and the buyer.

Ordinary loan

This is a loan over property on which there is a dwelling and freehold rights apply.

P

Possession

This is the date when the risk in the property passes to the buyer.

Progress Payment Form

This is a form signed and completed by the customer as building work progresses.

The assessor does an inspection and releases the retention accordingly.

Property Guarantee

This is a written document issued by a bank that promises to pay to the person or financial institution named, the sum referred to on registration in a Deeds Office of

the transactions mentioned in the guarantee.

R

Readvance

When you have repaid a portion of your home loan, you may borrow all or part of

the loan amount.

Registration

This is the process whereby ownership of the property is transferred from the seller      to the buyer via a deed of transfer. Your home loan will be secured at the Deeds

Office as a mortgage bond.

Repo rate

This is one of the credit management tools used by the Reserve Bank to regulate  liquidity in South Africa (customer spending). The bank borrows money from

the Reserve Bank to cover its shortfall. The Reserve Bank only makes a certain  amount of money available and this determines the repo rate. If the bank requires

more money than what is available, this will increase the repo rate – and vice versa.

Retention

This is the money retained by the bank and paid to you once the bond is registered. Payments are made in the form of progress payments as work on your house

progresses.

S

Safe custody

This is placing the bond documents in a safe place once an instruction has been

issued and the bond has been paid up.

Servitude

A servitude is a right to access which allows a local authority access to a property for inspection or installation of pipes, sewerage lines, electricity cables and so on. It

is registered against the title deed.

SG Diagram

This is a Surveyor General’s diagram and shows sub-divisions, servitudes, expropriations and so on. It becomes a loan condition when the assessor cannot

identify the property to be bonded, with the latest municipal map.

Shortfall

A shortfall arises when the bank’s estimate of what it will cost to complete the

building work is higher than the contract price quoted by the builder.

Share block developments

Companies own these properties and you buy the shares representing your unit or    house. Because no title deed can be had, the bank cannot consider granting loans

over share block developments.

Sole mandate

This is an agreement between the seller and the estate agent to exclusively market

the property. Once the agent is allowed to market the property, he has sole rights.

Stamp duty

Stamp duty is a tax imposed by the government.

Subdivision

Subdivision is the dividing of property into two or more portions.

Suspensive Condition

This is a clause in the agreement of sale whereby the validity of the contract is

made subject to the occurrence or non-occurrence of a future event.

T

Tax certificate

This certificate includes a breakdown of how much interest and insurance was paid,

as well as total repayments to the home loan account over a certain period.

Title deed

This legal document is registered at the Deeds Office as proof of ownership of

property.

Timeshare

This is a property development where occupancy time is sold. The bank does not

grant loans for timeshare properties.

Transfer fees

These comprise transfer duty, conveyancer’s fees and VAT.

Transfer duty

Transfer duty is a tax levied by the government on the purchase of immovable

property and is calculated on the purchase price.

V

Vacant land

This is a loan to purchase a vacant stand with a view to build in the future.

Variable interest rate

The official interest rate charged by the bank fluctuates according to the repo rate.

Variation agreement

This states that the bank may change the interest rate at any time without giving notice and you, as the customer, may not appoint your own insurers. A variation

agreement must be completed for all loans granted prior to 31 July 1990.

Voetstoots

This clause is always found in a sale document and means “let the buyer beware”.  All defects must be mentioned to the buyer upfront. If there are any defects in the property of which the seller was unaware, the buyer will acquire the property with

such defects.

W

Waiver of Lien

This is a legal document where a contractor waives his common law right to hold

control over a property if he is not paid in full.

Waterproofing Certificate

This is a guarantee by a waterproofing contractor that the item involved has been

adequately waterproofed in terms of the instructions specified by the manufacturer.

Z

Zoning

The local authority determines the purpose for which your property may be used,      for example, residential or business. If your property is granted business rights, talk

to your local authority as it may affect its saleability.