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QUESTIONS & ANSWERS FAQ
In this section:
- Property Related Questions
- Finance Related
Questions
Property Related Assistance
(Please note this is for the purpose of Guidance Only)
Q:
Where should I buy property ?
A:
This is decided by several factors: What is your goal, is it
Investment Related or is it to set up a home / base.
- If it is investment related, have you done your
homework?
There are many key factors when deciding to invest in property
for the sake of investment. You can find much of this
information by reading the local papers in the area or doing
some research on the internet. Do you know what is going on in
the area? What are the trends forecasts in the area? How
much are properties surrounding you valued and is there
development in the area? What % growth do you expect in 2, 5, 10
etc years and is it realistic there?
- If it is related to setting up a home / your primary
residence:
- Where is your family located & friends
- Where do you work
- Where is your choice of climate (by the sea / by the mountains
/ geographical location & weather patterns)
...so this is up to you, think about it seriously. It may be a
life changing decision, & make sure you can afford it.
Finance / Home Loan Related (Please note this is for the
purpose of Guidance Only)
Q:
What deposit am I required to put down.
A:
- Usually depending on where you are buying the seller
will dictate this amount.
When buying a house, it is normally a 5% - 10% deposit that
secures the investment.
- When buying off plan / development units, the developer will
usually set a minimum deposit to secure the purchase which could
be as low as R 5000,00.- R 20,000.00
- The more you put down, the less you would require to loan /
pay off & the less the bank owns.
Q:
What is considered to be a non resident ?
A:
A non resident - Is a person
(natural or legal entity) whose normal place of residence,
domicile or registration is outside the Common Monetary Area
e.g. visitors to South Africa.
Q:
How do I obtain
finance if I am a non-resident ?
A:
The answer is quite in-depth, so here is a basic
understanding of how to get this done. In short, apply to our
Mortgage advisors and it will be a great deal easier to get the
job done.
These persons may only be granted local borrowings for an amount
equal to the amount introduced from abroad and invested in South
Africa.Example: A non-resident invests R200 000 in South Africa.
He may be awarded local borrowings of an amount equal to the
amount introduced, therefore allowing him a home loan facility
of R200 000.
Q:
What are the credit requirements?
A:
Confirmation of income / affordability via
either a combination of:
·
Report
from foreign bank.
·
Employer’s letter.
·
3 months
bank statements.
·
Statements of assets and liabilities – overseas.
·
Debit
order from local bank account to facilitate the loan repayment,
to be funded from abroad or from rental in which case a copy of
the rental agreement is required.
While LTV is typically low, it nevertheless
remains essential to be satisfied with willingness and ability
to pay, especially considering the high cost and collection and
low values fetched at sales in execution.
Q:
What is the normal term of lending
A:
Normal lending criteria applies. Maximum term of 20 years,
except if the customer’s age indicates a lesser period.
Q:
What costs may apply ?
A:
The foreign national is liable for the following:
·
Bond registration and transfer costs
·
Attorney fees
·
Initiation fee
·
Security assessment fee
·
Any other fees charged by the Non-resident Centre to submit
the application on behalf of the customer for exemption of
exchange control regulations etc. These fees may not be debited
to the home loan account as it is in contravention of the Usury
Act.
Q:
Any Suggestions
A:
Need some advice ? Want some good reading material?
If you are a serious investor, and want more advice, I would
suggest reading some property related books, like Rich Dad
Poor Dad by Robert Kiyosaki & his affiliated book called
Rich Dad's Guide To Investing. If you are uncertain to what
you should be doing, these are real eye openers and should put
in a place to be more ready than most people to invest in
property. Nothing Down For The 90's is also a good book
by Robert G Allen.
Don't rush into it, do your homework, ask questions, have fun &
good luck !
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