financing related to buying a house

Question 1

mortgage/home loan?

Answer 1

money borrowed from the bank or financial institution to buy property. Then paid back in monthly installments, with interest, over a fixed period of time

Question 2

deposit?
how much percent is the deposit of the purchase price?

Answer 2

amount of money paid upfront by a buyer or tenant to show they are serious about buying or renting a property.
10-20%

Question 3

if borrower doesnt have enough cash, what can be used as security of payment to be provided?

Answer 3

collateral eg: life insurance or house

Question 4

mortgage protection insurance?

Answer 4

insurance policy that protects a mortgage lender if the borrower passes away, or becomes disabled or unfit for work

Question 5

comprehensive homeowners insurance (CHI)?

Answer 5

short-term insurance that protects the house against structural damage from fire, floods, natural disasters

Question 6

household insurance?

Answer 6

insurance that covers the contents of a house against fire and theft

Question 7

monthly mortgage payments?
the monthly installments may not exceed what % of homeowners income?

Answer 7

periodic amount paid to a mortgage holder for repayment of a mortgage loan
dont exceed 30% income

Question 8

what 5 things must the monthly mortgage repayments include?

Answer 8

1. loan repayment amount
2. interest on loan
3. life insurance premium
4. homeowners insurance premium
5. administration fee

Question 9

Repo rate?

Answer 9

the interest rate determined by the Reserve Bank

interest rate at which a country’s central bank (like the South African Reserve Bank) lends money to commercial banks.

Question 10

what is the ad of paying a fixed interest rate on monthly mortgage repayments for 24monhts?

what is the dis of paying a fixed interest rate on monthly mortgage repayments for 24monhts?

Answer 10

you dont have to pay more when interest rates rise

you will not pay less when interest rates drop

Question 11

occupational rent?
what % is the rent calculated at

Answer 11

when a buyer moves into prop before prop transfer is complete, the seller is paid rent during the property transfer process for a certain period
=1% of price of purchase

Question 12

conveyancer does what?

Answer 12

drafts a doc called deeds of transfer or conveyance and this is handed into the deeds office

Question 13

by whom, must the deed of transfer be signed for you to become the legal owner of the property?
what is this doc called?

Answer 13

Registrar of Deeds

Title deed

Question 14

transfer cost?

Answer 14

additional costs that are involved in the transfer of ownership from the seller to the buyer

Question 15

what 3 transfer costs are paid to the conveyancer?

what is a transfer duty? aka stamp duty

Answer 15

transfer duties
attorney fees
deeds office fees

tax you pay to the government when you buy a property

Question 16

Who in the government receives payment for transfer duties, and how is the amount determined?

Answer 16

South African Revenue Service (SARS), amount depends on market value of the prop

Question 17

when are transfer costs not paid?

Answer 17

1. when prop value is under 1 million
2. if its a new property bought from a developer

Question 18

who receives payment for attorney fees and how is the amount determined?

what is deeds office fees?

Answer 18

to the conveyancer for overseeing the transfer,
determined by the price of purchase

Fees paid to deeds office for registration of mortgage loan and tittle deeds

Question 19

Estate agent? and what they do

Answer 19

An estate agent (also known as a real estate agent) is a professional who helps people buy, sell, or rent property.

What an estate agent does:
Markets the property
Shows the property
Advises the seller or buyer
Acts as a middleman
Handles paperwork

Question 20

name 10 hidden costs that buyers dont always take into account?

Answer 20

1. mortgage registration fee
2. interim interests
3. bank initiation fee
4. property value fee
5. property tax
6. occupational rent
7. service or admin fee
8. current expenses
9. utility connection deposit
10. variable costs of attorney

Question 21

mortgage registration fee

Answer 21

fee payable to deeds office to register the mortgage in the name of the buyer
buyer pays this fee to conveyancer who drafts the mortgage registration docs

Question 22

stamp duty?/transfer duty

Answer 22

a tax you pay to the government when you buy property (like a house or land). Based on the prop price

Question 23

interim interests?

Answer 23

interest payable on the mortgage before it has been registered

Question 24

bank initiation fee?

Answer 24

banks charge a once-off fee for processing the mortgage application

Question 25

property valuation fee?

Answer 25

payable to the bank for the valuation of the property

Question 26

property tax? eg?

Answer 26

recurring tax paid by the owner of a property to the local municipality or government eg: sewerage and streetlights, rubbish removal

Question 27

service or admin fee?

Answer 27

bank charges monthly fee on loans for residential prop

Question 28

current expense eg?

Answer 28

removal costs, buying new carpeting, paint, curtains

Question 29

utility connection deposit and eg?

Answer 29

deposit must be paid to municipality for connecting services eg water and elec

Question 30

variable costs of attorney eg?

Answer 30

postage, electronic instruction fees and FICA (prood of address) fees

Question 31

name 6 bank requirements for granting home loans?

Answer 31

1. Income tax reference number! 2. an application form for the home loan 3. a certified copy of the offer of purchase 4. a certified copy of the buyer's South African identity doc or passport 5. proof of steady income 6. proof of current residential address