Glossary

  1. Building Loan: A building loan is where a retention becomes applicable on the loan amunt and the funds are advanced to the borrower in stages / progress payments during the construction period of the dwelling and improvements.
  2. Interim Interest: Once funds are paid out of the home loan account, interest is calculated on a daily basis on the outstanding balance. The interest is debited to the home loan account at the selected billing date. (The longer it takes to complete the building, the less money is available in the account)
  3. Voetstoots
    This clause is always found in a sale document and means “as is “. All defects must be mentioned to the buyer upfront.
    If there are any defects in the property of which the seller was unaware, the buyer will acquire the property with such
    defects.
  4. Builder: A person who constructs buildings under a contract
  5. Owner – builder:
    • not in the business of home building,
    • building a home for his own occupation and
    • not using an NHBRC registered home builder to assist in the building of that home.
  6. NHBRC: The National Home Builders Registration Council ensures that builders extend their commitment to customers by providing a
    five year structural warranty against any structural defects that have manifested from the date of occupation. For any further
    information on the NHBRC their website www.nhbrc.org.za can be visited.
  7. Attorney: An alternative word for lawyer or conveyancer. A person who has been trained in the law and who has been certified to give legal advice or to represent others in a court of law
  8. Initiation Fee: This is a once-off fee allowed in terms of the NCA (National Credit Act) to offset the cost of opening the loan account.
  9. Monthly Service Fee: A monthly service fee charged on all new registered loans.
  10. Progress Payment Form: This is a Bank form signed and completed by the customer and contractor when payments are requested. The valuer conducts an inspection and make recommendations for releases from the retention accordingly.
  11. Interest Rate: The interest rate in a financial sense is the method of stating the charge or fee for the use of money which has been borrowed. A 5% interest charge means that an amount equal to 5% of the amount borrowed will be charged each year by the lender as a bank fee. It is normally stated as a percentage annual amount, compounded monthly. The finance agreement must state which type of interest rate is being used, i.e. fixed or variable (linked), compounding interest percentage or simple interest percentage. If the interest rate is a compounding rate, the basis on which it compounds must be stated, e.g. monthly, quarterly, etc. A compounding rate is normally stated as an abbreviation, e.g. a monthly compounding rate would be stated as NACM (nominal annual interest rate compounded monthly).
  12. Transfer Costs: These comprise transfer duty, conveyancer’s fees and VAT. Transfer duty is a tax levied by the government on the purchase of immovable property and is calculated on the purchase price.
  13. Traditional Home Loan: Our Traditional home loan provides basic finance for the acquisition of an established/existing residential property. It can be combined with a range of options and facilities to personalize the home loan to suit a customer’s specific needs.
  14. Bond Registration Fee: These are the conveyancer’s fees, stamp duty and VAT. They are payable by the buyer to the attorney attending to the registration of the bond on behalf of the bank. Conveyancing fees and stamp duty are calculated on a sliding scale based on the bond registered.
  15. Home Owners Comprehensive Insurance Cover: This policy provides cover for certain losses or damages to the property. These are specified in the policy document.
  16. Deposit: This is the amount the customer has available to put towards the purchase of the property as a guarantee.
  17. Waiver of Lien: This is a legal document where a contractor waives his common law right to hold control over a property if he is not paid in full.
  18. Total Package Price: This is the total amount which consists of the land amount plus building contract amount.