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Mortgage Bonds - Questions You Ask & Answers You Need

Mortgage bonds and the transfer of immovable property are sophisticated processes that require both hands-on experience and the knowledge to navigate and manoeuvre.

There are many highly technical and legal procedures that go into these processes and in the event that these are not adhered to, one’s title to ownership may fall short on such a high value transaction.

It is for this reason that our attorneys receive loads of mortgage bond enquiries from clients who visit our offices as well as others who engage us on our social media pages.

Our website and social media pages are engaging and informative. However, we always advise our clients to engage us on legal matters and not to simply rely on information found on the internet as each situation has factors specific to it.

Be that as it may, in this article we will touch on a few mortgage bond queries for the benefit of everyone who might have the same query.

Mortgage Bonds South Africa

What is a Mortgage Bond? 

This is a loan borrowed against an immovable property, and the immovable property is used as security for the funds borrowed.

Who is the Mortgagor?

This is the party that borrows finance from the mortgagee e.g. bank and uses such property as assurance for the loan.

Who is the Mortgagee?

The financial institution (e,g bank) or other party/entity that lends money to the mortgagor.

What information and documents are needed for bond application and bond registration?

This is not a one-size fits all list as different financial institutions have slightly different requirements.

  • Application forms (Specific to each bank)
  • Proof of identity
  • Physical address
  • Financial status documents (e.g proof of income, bank statements)
  • Proof of employment or trade (business)
  • Credit profiles (usually secured by the mortgagee)
  • Marital status
  • Insurance
  • Contact details
  • Income tax details

Exactly when does the bond become effective?

The mortgage bond becomes effective upon its successful registration in the Deeds Registries Office.

Who is a Bond Originator and what do they do?

This is the party who assists home seekers to apply for a bond at financial institutions. A bond originator avails the application to various lenders and attends to finding the bond with the most favourable terms for the bond seeker (home buyer). Bond originators are an important part of the process as their work has a huge impact on what the home seeker will pay ultimately for the duration of the bond agreement.

Are both spouses required to sign the bond documents?

In the event that they are married in community of property, they are required to give their written consent to the registration of the bond and both spouses will need to sign all bond and transfer documents. Where spouses are married out of community of property, no consent is required as there are separate estates between the spouses and each spouse may mortgage their property without the other. With regards to foreign marriages, one party may purchase and bond a property on their own but they will require their spouse’s consent to bond.  

Van Deventer & Van Deventer Inc. - Your Attorneys in Johannesburg & Cape Town

We hope the information above sheds some light on the issues concerned. In our next instalment we will consider further queries as and when we receive them from our clients and the general public. We have a fully-fledged Conveyancing Department that assists with transfers of property.

Further, within our group we have Phoenix Bonds that specialises in bond origination and bridging finance. They assist home seekers to secure mortgage bonds with the most favourable terms.

Contact us for comprehensive assistance.  

The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages.

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