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Faqs

BUYING OF IMMOVABLE PROPERTY FAQs

As a Buyer what will my transfer cost be?

Transfer duty is calculated on the value – not the price – of the property, although,
SARS will generally regard the purchase price of the property to be its value.
However, if SARS believes that the purchase price does not correspond with the true
value, which may be the case if, say, a property is sold to a family member and its
value understated, transfer duty will have to be paid on the true or fair value.
Transfer duty is calculated on the total cost of the property to the buyer.

What is transfer duty?

Transfer duty is a tax payable on all types of properties and is owed over and above
the selling price.

How do I determine what I can afford?

It is advisable that home buyers undergo a prequalification process, which provides
the opportunity to do an affordability check and a credit check simultaneously.

Being prequalified enables you to check your credit score, and determine what you
can realistically afford.

You can use MyDR Properties Home Loans' prequalification online service and
submit an application to all the major banks and financial institutions.

What is an Property Practitioner's commission?

The commission charged by estate Property Practitioners flactuates, the national
average ranging between 5 and 7.5 percent plus Value Added Tax (VAT), which is
invariably paid by the seller.

What is a buyer's market?

Market conditions that favour buyers. With more sellers than buyers in the market,
sellers may be forced to make substantial price concessions.

FINANCIAL FAQs

What is amortization?

Amortization is the process by which loan principal decreases over the life of a loan,
typically an amortizing loan. As each mortgage payment is made, part of the
payment is applied as interest on the loan, and the remainder of the payment is
applied towards reducing the principal.

An amortization schedule, a table detailing each periodic payment on a loan, shows
the amounts of principal and interest and demonstrates how a loan's principal
amount decreases over time. An amortization schedule can be generated by an
amortization calculator. Negative amortization is an amortization schedule where the
loan amount actually increases through not paying the full interest.

What does bond approval mean?

Once your chosen Bank has received all the relevant documents, the approval
process begins. Bond approval is always subject to a property valuation.The Bank
will approve the loan subject to a property valuation, and subject to meeting all the
credit and FICA requirements.

What is FICA (i.e Financial Intelligence Centre Act).

The Financial Intelligence Centre Act, 38 of 2001 (FICA), came into effect on 1 July
2003. FICA was introduced to fight financial crime, such as money laundering, tax
evasion, and terrorist financing activities.

The aim of FICA is to establish and maintain an effective policy and compliance
framework and operational capacity to oversee compliance and to provide high
quality, timeous financial intelligence for use in the fight against white collar crime,
money laundering and terror financing in South Africa. FICA was established to
ensure integrity and stability of its financial system, to develop economically and
ensure responsible and honest citizens. FICA brings South Africa in line with similar
legislation in other countries.

What is a prime lending rate?

The benchmark rate is the rate at which private banks lend out to the public.

What is a credit score?

A credit score, also known as a credit rating, is a number that reflects the likelihood
of you paying credit back. Lenders like banks and credit card companies will look at your credit file when they calculate your credit score, which will show them the level
of risk in lending to you.

What is equity?

Equity is the difference between the market value of your home and the amount you
owe the lender who holds the mortgage. Your equity is the money you will receive
after paying off the mortgage if you were to sell the home.

What is Debt-to-Income Ratio?

A ratio which shows a Buyer's monthly payment obligation to debts and which is
divided by gross monthly income to ensure affordability

What is a home loan?

A home loan is the funds a buyer has to borrow from a bank or financial institution to
purchase a property, generally secured by a registered mortgage to the bank over
the property being purchased.

A home loan requires you to pledge your home as the lender's security for
repayment of your loan.

The lender agrees to hold the title or deed to your property until you have paid back
your loan plus interest

What is a building loan?

A building loan is used to finance the construction of a house on vacant land or to
finance additions and renovations to an existing home.

What is a building loan?

A building loan is used to finance the construction of a house on vacant land or to
finance additions and renovations to an existing home.

ALWAYS SUPPORT YOU

HOW CAN WE HELP?

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