CANCELLING YOUR BOND

CANCELLING YOUR HOME LOAN – THE INS AND OUTS, THE DO’S AND DON’TS

The following guide will assist you step by step through the process to cancel your bond.

Why would you cancel a bond?
Different reasons are identified for a bond to be cancelled:

• Selling your property to purchase a new property
• The bond has been paid off (settled) and needs to be cancelled
• Switch bond i.e. switch the bond to another financial institution

Process to cancel your bond

1. Notify your bank of your intention to cancel, either via your attorney or directly to the bank in writing
2. The bank issues electronic cancellation instructions to the attorney who will attend to the cancellation in the Deeds Office and attend to their guarantee requirements
3. The bank releases the original title deed held as security to the bond cancellation attorneys
4. The bond cancellation attorney will liaise with the transferring attorneys and request guarantees for the settlement amount (if any)
5. Guarantees are issued by the transferring attorneys
6. Once cancellation documents (Karen do you mean the refund form?) are signed and in conjunction with the transfer attorneys, the documents are lodged in the Deeds Office
7. Cancellation Documents are examined by the Deeds Office and comes up for registration.
8. Bond is cancelled in the Deeds Office and guarantees are simultaneously paid to settle any outstanding amounts on the bond

What cost are involved with the cancellation of your bond

• Legal Cancellation Fees - the fee and expenses charged by the bond cancellation attorney in order to cancel the bond in the Deeds Office and payable by yourself to the attorney
• Early termination Fee – a fee charged by the bank when cancelling your bond within 90 days from notice given to the bank. It is advisable to ensure that your bank is informed of the intention to cancel as soon as possible. This fee can be waived by certain financial institutions
• Monthly bond repayments – monthly debit orders for your bond will still be payable until your bond has been formally cancelled in the deeds office
• Insurance – Property and / or life insurance will still be payable up until your bond has been cancelled

General Questions

Q: Does my bond automatically get cancelled after my last bond payment?
A: No, you have to request cancellation of your bond from your bank, pay the attorney cancellation fees and proceed to cancel the bond in the Deeds Office

Q: Can I get my original Title Deeds after my last bond payment?
A: No, you will only receive your original Title Deed after the bond is formally cancelled in the Deeds Office and is delivered to the bond cancellation attorney after cancellation

Q: Can I decide to keep my bond account open after the debt has been settled?
A: Yes, many people prefer to keep their bond account active after the debt has been settled in order to be able to access these funds at a later stage. You will still be responsible for monthly service fees as well as any insurance payments applicable to your bond

Q: Will I have access to my flexi (access) funds at any time?
A: Your flexi bond will remain available until the cancellation process has been initiated. Once you notify your bank of your intention to cancel the bond, you will not have access to any funds anymore. If you do require access to these fund (for example to pay a deposit on a new property) you will need to ensure that you withdraw the necessary money prior to the notification to the bank to cancel.