Since the introduction of the Consumer Protection Act (CPA) on 1 April 2011 players in the property market have been debating over the effect that the CPA will have on property transactions with the imminent death of the “voetstoots” or “as is” clause.
Although the majority of media reports deal with the implications of the CPA from the seller’s perspective, potential property buyers must be made aware of what some sellers are doing to combat their increased liability in terms of the act.
The South African market is much more stable than it once was and is now proving to be a great option for investors wishing to buy properties abroad, for many of these investors, this will be a second or third property to add to the portfolio they currently own. The warm climate, excellent views and low cost of living are all reasons people are attracted to South Africa.
House prices within South Africa have increased greatly over the past few years yet the average house prices remain some of the lowest round the world. There is also no time difference between the UK and South Africa making it easy to do business with one country whilst remaining in another – it also means there’s no jet lag to worry about when travelling between the two.
Banks remain cautious in home loan lending
http://www.sacommercialpropnews.co.za/property-types/housing-residential-property/3565-banks-remain-cautious-in-home-loan-lending.html
In spite of the interest rate being at a 33 year low, banks remain very cautious in terms of granting home loans with all information submitted to them being thoroughly analysed to ensure the applicant’s affordability, says Kim Pistor, legal advisor and conveyancing manager for Rabie Property Group.
Pistor said while it was relatively straight-forward to confirm the monthly earnings of salaried individuals, the same cannot be said for those who are self-employed. “In these cases supporting documentation is a key element to a successful mortgage application with the banks requiring a financial history of the preceding two to three years.
“These applications usually take longer to obtain bond approval as they are often initially declined due to the various banks tight criteria related to self-employed individuals. It is often not the client’s own bank who eventually issues an approval and it is for this reason that the services of a mortgage originator are beneficial,” says Pistor.
In recent times, the incidence of mortgage refinancing has gone on a rise. It is referred to as replacement of the original mortgage loan with a new one with different terms and conditions. The terms and conditions of a refinance mortgage depend upon several factors such as risks involved in it, credit worthiness of the borrower and the existing legislations. In majority of the cases, you opt for refinance mortgage when you are under financial stress. Sometimes, it is also referred to as debt restructuring.
There could a variety of reasons, why you, the homeowner, opt for mortgage refinancing. It ranges from reducing the rate of interest, shorten or lengthen the term of the loan, shifting from an adjustable rate mortgage (ARM) to a fixed rate mortgage (FRM) and vice versa. Aside from these, you sometimes opt for mortgage refinancing so as to tap your home equity to make some big purchases and for consolidating debts that you owe. Here discuss about the various reasons to take out a refinance mortgage.
To reduce the rate of interest
One of the main reasons to opt for mortgage refinancing is that it reduces the rate of interest. In other words, your monthly repayment amount gets reduced so that the mortgage loans become more affordable to you. As a thumb rule, it is said that if the rate of interest can be lowered down by at least 2%, it makes good sense to opt for mortgage refinancing. Lower rate of interest does not only help you save money, but it also helps you build equity in your home.
To change the term of the mortgage loan
If you want to pay off the mortgage loan in a shorter span of time, you can do that through mortgage refinancing. Again, if you face difficulty in making the monthly mortgage payment, you can reduce your monthly payment amount by increasing the term of the loan. This somewhat eases the pressure of making a very steep monthly mortgage payment.
Shifting from ARM to FRM and vice versa
While the initial rate of interest associated with ARM is less than the rate of interest associated with FRM, but subsequently the rate of interest associated with ARM may rise with every rise in the market rate of interest. In this situation, if you are into ARM, it makes sense for you to switch to the stability of a FRM. On the other hand, if you are into a FRM, and find that the market rate of interest as well as the rate associated with ARM is substantially lower than the rate of interest associated with FRM, you may opt for switching to ARM. However, this is possible only through refinance mortgage.
Apart from the above mentioned reasons, you can take out a mortgage refinance for few other reasons too. If you use mortgage refinancing carefully, it can also serve as an excellent tool to contain your debt. Again, with low monthly repayment, you can build up equity in your home much quickly.
Property Transaction Kit
http://thepropertymag.co.za/industry-news/3127-new-property-transaction-kit.html
Dianne Brock, the new general manager of the Western Cape Institute of Estate Agents, has recommended a new computerised property transaction kit.
The aim of this kit is to facilitate the sale and transfer of property in compliance with the stringent criteria of the new Consumer Protection Act.
The new kit, said Brock, covers every aspect of a property deal including the valuation, the role of the conveyancing attorney, the standard sale agreement, the title deed and the Surveyor General’s diagram of the property. Also included are the body corporate and homeowners’ association rules, building plans, the zoning certificate, the house inspection report and the beetle, electrical, plumbing and gas certificates, as well as a short legal section on dispute resolution. This encourages the insertion of a mediation of arbitration clause in the sale agreement and has recommendations on how to insure against litigation costs.