Considering a large proportion of homes are financed by the country’s largest banks, the popular internet discussion about who owns a mortgaged home in South Africa still persists.
While some contend that the bank owns your property, Gavin Lomberg, the chief executive of ooba property Loans, settled the debate by asserting that the truth resides in two key points:
- The authority that you elect to take on as soon as the bond is transferred into your name.
- The all-important title deed.
“As a homeowner, important decisions related to your home are dictated by you – not the bank,” said Lomberg.
“You have the power to decide whether you wish to renovate, extend, decorate, paint, update the landscaping, lease out the property or even sell. You are also responsible for the maintenance, repairs and general upkeep of the property.”
He went on to say that if you sold, the initial proceeds would be used to pay down any remaining balance on your home loan.
Anything over and beyond would be profits that you could keep.
So, What is a title deed?
A title deed serves as an essential legal document that establishes who owns a property (or piece of land).
“When you purchase a property, a conveyancing attorney is appointed to transfer the title deed into your name, and you will need to cover the relevant fees related to the transfer.
“The transfer process usually takes about three months following the approval of the home loan,” Lomberg explained.
After the bond registration and transfer process is completed, the title document will be recorded at the Deeds Office, which might require as much as three weeks to complete.
If I default on my repayments – is the house still mine?
The recurring topic of ‘who owns your property’ highlights some South Africans’ misconceptions about homeownership, he said.
These arises primarily from the repossession process, which allows a bank to seize and sell your asset if you fail to make your house loan payments.
While this is true, Lomberg emphasised that the repossession process causes a legal and administrative headache for banks and is thus viewed as a last resort, which means that they are often willing to work with the homeowner to find a way to help them repay their debt over time.
He advised that homeowners in financial trouble have access to the following options to avoid repossession:
Rearranging your repayment agreement.
Selling your house.
Accessing Credit Insurance.
IOL