Real Estate Investor Magazine South Africa December 14/ January 15 | Page 8

Q
A
ASK THE EXPERTS Q&A

Q

upfront

Q Dwain Zimri asks: I’ve started
a business and my core business
is buying and selling repossessed
property. I’m unemployed and don’t
have an un-bonded property to use
as collateral, I do however have a life
policy in place. What avenues can I
use to secure finance?

A
A

Meyer De Waal of Oosthuizen
& Co, Meyer De Waal Attorneys
answers:

How do you intend to pay for these purchase transactions?

At an auction you usually have to put down a deposit (10 %) as
well the auctioneer or sheriff commission. The balance must then
be paid in cash – but you would be able to register a mortgage
bond to cover the balance of the purchase price. To raise a bond
– you may require the following:
•
•
•

Good credit score
A steady income to show your affordability
A deposit of ± 10 -1 5 % (if you do not qualify
for a 100% loan from the bank).

If you only have the security of a policy – it may not be sufficient
to raise a loan – unless you can cash in the policy in advance to
raise sufficient cash to buy the property in cash.

With ‘affordability’ being one of the main requirements as
‘prescribed’ in terms of the NCA – a regular income is one
of the most important requirements to raise a home loan –
unfortunately an asset alone (police or a paid-up home) is not the
strongest leg to stand on – if you do not have a regular income
– as you mentioned that you are currently unemployed.
If you become self-employed – there are in addition deferent
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