- Purchasing a home includes additional expenses aside from the home itself. Transfer fees and bond registration cost are probably the biggest costs associated with buying a home.
- Transfer fees are paid to a transferring attorney, appointed by the property’s seller to transfer ownership to you.
- Transfer duties only apply to properties worth more than R1 000 000.
Finding your dream home, taking the plunge to put in an offer to purchase and having your offer accepted is an exciting process for a first-time buyer. Then reality hits with the admin that accompanies a bond application when you quickly discover that there’s more to buying a home than simply finding the money to match the purchase price.
Buying a home is the biggest financial commitment that most people will make in their lifetime. There are many other expenses to factor in, and it’s worth planning for these in advance of transfer so that you can be sure you have the finance available.
Transfer fees and bond registration cost are probably the biggest costs associated with buying a home. You can get an idea of what those costs are by using ooba Home Loans’ Transfer Costs Calculator. For example, on a R1 million bond for a R1 million freehold property, with the seller not VAT registered and the purchase being conducted by a natural person, the transfer cost estimate would be R24 867 (incl. VAT) and the bond registration cost estimate would be R30 905 (incl. VAT).
Banks considering an application for a R1 million bond on a R1 million property will base their approval of a 100% bond on your income, expenses and ability to meet the monthly repayments. Even if they approve it, you’ll need to cover the costs of transfer and bond registration, so it’s essential to have the funds available for this part of the home-buying process. If they don’t grant a 100% bond, you’re likely to need a 10% deposit (R100 000) on an application for a R1 million bond.
What are transfer costs?
Transfer fees are paid to a transferring attorney, appointed by the property’s seller to transfer ownership to you. This cost varies, depending on the purchase price and comprise the conveyancer’s fees plus VAT, and the transfer duty payable to SARS. Transfer duties only apply to properties worth more than R1 000 000.
Can transfer fees be included in a bond?
If you, as a first-time homebuyer manage to secure more than a 100% bond, the home loan financing is likely to cover the cost of the property as well as the transfer duty and related costs such as conveyancing fees, and the bond registration costs. That means that although you won’t have to pay a deposit or transfer and bond registration costs upfront, you’ll have to cover the higher monthly home loan repayment, to cover these elements included in the home loan.
“It’s a fantastic opportunity to get involved in the property market as many first-time buyers find it difficult to save up for the deposit and transfer duty and other costs. Products that offer 104% financing assist people to get into the property market early without having to save for the initial deposit or additional costs, which can take a fairly lengthy time to accumulate and thus increase the barriers to entry.”
Better than prime
ooba Home Loans can assist you to negotiate with the banks to borrow at better than prime. “Of course, in each case, it depends on the individual circumstances of the applicant.”
ooba Home Loans also offers a range of tools that make the home buying process easier. Start with their Bond Calculator, then use the ooba Home Loans Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.
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Ooba home loans services are simply the best. My Consultant Bianca Dancer was so hands on and helpful from the get go. She guided me through the entire process and put me at ease being a first time buyer. I highly recommend their services.
Jay Govender and Maleshini Reddy from OOBA provided outstanding assistance and guidance in securing our home loan. Response times were excellent and they were professional and friendly.
Estelle Vorster was really helpful in securing the best deal for my home loan, she not only negotiated a lower interest rate she went as far as securing 50% discount on the transfer costs.