The Bond Registration Process
A client will often require funds to assist in the purchasing of a property, or to improve their existing property, or to consolidate his or her debt. In order to cater for their needs they will go to a bank for a loan. Let us describe the bond registration process in relation to the above needs.
PURCHASE OF A NEW HOME
The client will make an application for a loan to the bank setting out full details of assets and liabilities, income and expenditure. Once the bank has approved the loan, the attorneys (conveyancers) are instructed to attend to the registration by means of a loan agreement and quotation setting out the loan amount, interest, terms and conditions of the loan and requesting that as security for the loan, a Mortgage Bond, be registered in favour of the bank over the property being purchased.
The attorney attending to the transfer of the property (transferring attorney) will be contacted by the bank's attorney, requesting from them a copy of their draft title deed and guarantee requirements. The bank's attorney will also make contact with the bank’s client (also known as the Mortgagor) and request copies of their Identity documents and marriage certificates, if applicable. When the bank's attorney receives the above mentioned documents he will draw the mortgage bond documents and will call upon the client to sign and pay the proforma account for the registration of the Mortgage Bond. Payment thereof will be required immediately especially as the costs include deeds office lodgment fee which must be paid up front.
DOCUMENTS TO BE SIGNED
- A Power of Attorney to Mortgage - this document gives the attorneys the authority to register a mortgage bond on behalf of the clients in favour of a bank.
- Authority for payment - this document instructs the bank on registration to make payment of the borrowed funds.
- Loan agreement and quotation – the client, by his or her signature to the agreement acknowledges his or her obligation to the bank to comply with the loan terms and conditions.
- Draft Mortgage Bond - this is the document that records the client's financial obligations to the bank in the deeds office.
- Affidavits - this confirms the client's personal particulars regarding identity, proof of address, tax, marriage and insolvency.
- Suretyship - is required when a client needs a guarantor for the loan.
- Any other documents as may be required by the bank to satisfy the conditions of the loan.
IMPROVEMENTS AND CONSOLIDATION OF DEBT
The bank will forward the letter of grant together with the title deeds to the attorneys to register a bond for the amount of the loan that has been granted to the client. Thereafter the procedure is similar to the above except there is no interaction with any transferring attorneys. Whenever a Mortgage Bond has been registered it affords the client access to the funds and affords the bank good security for the loan given.