All Banks have certain fees which they charge when bonds are granted, together with other disbursements, which become immediately due. It is useful to know what these are and how each respective bank debits them.
These include, amongst others:
- Administration Fee: This is a fee charged for the admin work done in processing a bond application. It is usually fairly high but covers the Bank's expenses.
- Inspection Fee: A building inspector employed by the bank has to do a routine inspection of the property to see whether it has sufficient value to justify the amount of the loan sought. A valuation fee is also charged.
- House owners Insurance Premium: Every bank requires the property to be fully insured. Most have their own insurance companies to serve this purpose. The annual premium will be due immediately on registration of the bond, the amount depending on the value of the buildings on the property. The borrower is not obliged to take out a policy with the bank's insurance company, he is completely free to arrange his own homeowner's insurance with a company of his own choice.
The present policy of the major banks varies from bank to bank. All of them debit their fees one way or the other though some, usually during times of special promotions, will offer to waive their charges or even to pay the attorney's bond costs.
CREDIT:
Property Law Publications
John Gilchrist
082 904 1300
