How to use your bond to finance a home renovation
Category Industry News
We chat to Kay Geldenhuys, Head of Sales Fulfilment at Ooba, to find out the ins and outs of utilizing your bond to finance a home renovation.
- Several home buyers have been extending their home loans in order to do home upgrades/renovations. How does the application process for this work?
The borrower will be required to apply for the further loan to the bank that currently holds the first mortgage bond on the property. The bank will conduct a full affordability and credit-worthiness reassessment of the borrower to ensure that the borrower qualifies for the further loan applied for. The bank will also reassess the property in order to ensure that there is sufficient value in the property to cover the further loan amount for which the borrower has applied.
- Is this extension added onto your monthly repayment?
Yes. Once the further loan amount has been disbursed, the bank will notify the borrower of the new higher instalment that is payable.
- Does the bank pay the suppliers directly or is the money deposited directly into the borrower's account?
The borrower can choose for the bank to either pay him or her directly or to pay the building contractor.
- What documentation would you require should someone wish to go this route?
The borrower will be required to provide the bank with the following documentation:
- Latest proof of income
- Signed and dated Income and Expenditure statement
- Copy of the approved plans for the renovations
- Copy of the quotation for the cost of the renovations from the building contractor
- Proof that the building contractor is registered with the NHBRC
- Proof that the municipal rates and taxes on the property are paid up-to-date.
Author: Adrienne Hersch Media Team