In simple terms, it is a loan given to you by a home loan provider, where the home or property you are purchasing is used as a form of security in case you cannot make the loan repayments.

From the time that you secure a bond and it is registered, the home loan provider will keep your property’s title deed until your home loan is paid back in full. The home loan provider is legally entitled to keep the title deed, because until you have fully repaid your home loan your home remains their property.

Before you ​apply for a home loan:

  • Have a good idea of what you like and don’t like, where you’d like to buy and the value of property in that area
  • Compare home loan rates and home loan providers for the best deal
  • Keep your family’s needs in mind and make sure the home you buy works for your lifestyle.

A small additional payment into your home loan account every month can make a big difference. The interest on your bond is calculated daily. This means the amount you owe the bank could increase every day. Paying extra money into your bond account, right from the start, before interest starts increasing, will help reduce the final cost of your home loan and decrease your payment period.

If you can’t make the loan repayments, your home loan provider will take your home. It will also start a process known as foreclosure, where it will attempt to get back the balance owing by selling the home at an auction. When the property is sold, the money from the sale is used to pay what you owe, minus the legal costs. If there is an outstanding amount, you will be responsible for paying it.

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