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Cancelling your bond
with FNB Home Loans
Cancelling your bond with
FNB Home Loans
First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).
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Selling your property or cancelling your bond can be very difficult. The good news is that we can guide you
through the process, as property professionals who really know what we are talking about.
Introduction
Introduction
What happens next?
Cancelling your bond has different implications, therefore it is important to understand the type of
cancellation transaction:
Costs and fees
Selling your property and wanting
to purchase a new property
Paid Off Account (when you have
repaid your full loan prior to
the expiry of the term)
Switching from FNB to another
financial institution
Matured loan (when you have
repaid your full loan and
the term has expired)
Settlement figure
Managing your
home loan through
the cancellation
process
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There are a host of important aspects to take note of during the cancellation process. The following information is a guide to
assist in understanding the various aspects involved with a cancellation. FNB receives a request to cancel the bond over the
property, either from yourself or from an attorney.
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What happens next?
Introduction
What happens next?
Once you have accepted the offer to purchase on your house, or you have paid up the loan and wish to cancel the bond, in order to get your Title Deed,
or you have decided to move your loan to another financial institution, the process leading up to cancellation of your bond with the SA Deeds Registrar
(Deeds Office) is complex. Fortunately, it usually runs its course with you having little involvement. Please note that the cancellation of the bond must
be presented to the Deeds Registrar by a qualified Conveyancing Attorney. This process can take up to 3 months, and is dependent on external factors
beyond the Bank’s control (i.e. Deeds Office, rates clearance certificate, SARS requirements).
Costs and fees
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Managing your
home loan through
the cancellation
process
Important
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Bank
Bank receives a request for
cancellation of the bond
from you or an attorney.
Attorney
Cancellation instructions are issued
by the Bank to the Transferring
Attorney and a panel Cancellation
Attorney, providing them with the
guarantee requirements to settle
the loan with FNB. You will need to
pay the attorney for their services.
Deeds Office
Documents are lodged in
the Deeds Office by the
Cancellation Attorney.
Attorney
FNB releases the original Title Deed and Mortgage
Bond to the Cancellation Attorney. The Cancellation
Attorney liaises with the Transferring Attorney and
receives guarantees to settle the existing loan where
applicable. This process is not applicable on a paid
up loan account.
Attorney
Cancellation documents must be
signed with the Cancellation Attorney.
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Introduction
What happens next?
Costs and fees
Settlement figure
Managing your
home loan through
the cancellation
process
Deeds Office
Documents are examined
by the Deeds Registrar and
may be passed or rejected.
Deeds Office & Attorney
Matter comes up on Preparation in the Deeds Office.
This is normally one day before cancellation of the bond
and the Cancellation Attorney must approach the Bank
for final settlement figures. This step is to ensure that
the initial settlement figures issued are still sufficient to
close the home loan account.
Attorney
Bond is cancelled and the Transferring Attorney
ensures that all payments are finalised for the seller and
purchaser. On a paid up loan, the Cancellation Attorney
will finalise payments for the customer.
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Once the bond is cancelled, the attorneys will pay FNB in accordance with the settlement figures provided
upfront. This amount will be credited to the home loan account and any surplus funds will be refunded in terms of
arrangements made with you and the attorney. The home loan account will be closed.
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Costs and fees
Introduction
On a cancellation of a home loan if you are selling the property, the costs you can anticipate are as follows:
1. Attorney cancellation fees. Please note this cancellation fee is charged by the attorneys for work done by them as well as Deeds Office fees, What happens next?
this fee is for your account and may vary depending on the number of bonds you hold over the property that needs to be cancelled.
2. An Early Termination Fee (where applicable) - please note that a 90 day notice period is required by the Bank of your intention to cancel the Costs and fees
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bond. You may give this notice yourself or you can leave this task to your attorney. The Early Settlement Fee is calculated on your outstanding balance at the current interest rate for a period of 90 days.
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If you have served the full 90 day notice period, no Early Termination Fee will be charged.
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If you have only served a portion of the 90 day notice period, the Early Termination Fee will be charged pro-rata for the remainder of 3. Managing your
home loan through
the cancellation
process
Important
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the 90 days that must be served.
Bank costs and fees where applicable. No fee is charged by the Bank on a paid up bond, however in the event that you wish to keep the account open, a monthly service fee will be charged to your account.
4. Municipal rates and taxes must be paid up to date and the clearance certificates must be obtained. If the property is a Sectional Title, a Body Corporate clearance certificate is required from the Managing Agent. Where a Home Owners Association is established, a clearance certificate is required.
5. Personal income tax must be paid up to date.
6. The cost of an electrical compliance certificate, which must be obtained and submitted.
7. Estate Agent fees where applicable.
8. Monthly home loan repayments to your Bank until the loan is cancelled.
10.
Property Insurance and Life Assurance premiums (which may be paid via your home loan or directly from your transactional account).
Not meeting any of the above may result in a delay in the transferring process.
For the updated Pricing & Fees, refer to our Annual Pricing Guide at www.fnb.co.za
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Settlement figure
Introduction
On receiving a cancellation request, the Bank will calculate the settlement figure. Assuming that the mortgage bond
will be cancelled within 90 days, certain provisions will be made for a 90 day period, where applicable:
What happens next?
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Outstanding home loan balance as at date of instruction issued to the attorney
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Accrued Interest at current rate from date of instruction to date of payment
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Monthly Service fees
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An amount equal to one debit order payment
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Home Owners Comprehensive Insurance Cover premium (if paid through the home loan)
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Life Assurance premiums (if paid through the home loan)
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Early settlement/ termination fee (if applicable)
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Legal fees (if applicable where legal action may have been initiated)
Costs and fees
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Managing your
home loan through
the cancellation
process
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When the matter comes up on preparation in the Deeds Office (This is normally one day before cancellation of the bond), the Cancellation Attorney
will approach the Bank for final settlement figures. This step is to ensure that the initial provisioned settlement figures issued are still sufficient
to close the home loan account. This ensures amounts are accurate should there have been any changes to the account, such as a change in the
interest rate.
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Managing your home loan through the cancellation process
Introduction
What happens next?
Once your bond is under cancellation, there are some important matters that we would like you to be aware of,
so that we can help you manage your home loan efficiently. The next section covers the following aspects:
Benefits, Rewards & Freebies
Home Owners Comprehensive Insurance Cover
Costs and fees
Life Assurance
Accessing funds on your home loan whilst under cancellation
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Statements
Repayments
Managing your
home loan through
the cancellation
process
Important
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Paid Off Home Loan
Matured Loan
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Managing your home loan through the cancellation process
Introduction
What happens next?
Benefits, Rewards & Freebies
As a valued customer you may have qualified for a range of Benefits and Rewards for the duration of your home loan.
This section aims to advise you of the impact the cancellation of your home loan will have on various Benefits and
Rewards. In addition, there are a range of benefits that you could receive if you meet the respective qualifying criteria,
terms and conditions. For more details, enquire with our Home Loans consultant or visit www.fnb.co.za
Costs and fees
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Managing your
home loan through
the cancellation
process
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Move Home
Not Your
Home Loan
Property
Leader
Quick Sell
eBucks
Will
Move Home not your Home Loan
Once you are an FNB Home Loan customer, there’s no reason to move! By staying with us you’ll enjoy a number of fantastic benefits. An
offering suitable for our existing customers.
Visit www.fnb.co.za to see how much you can save. Terms & conditions apply.
1. Save 100% on bond registration attorney fees
2. Get an early termination fee rebate
3. Get a bond cancellation attorney fee subsidy
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Managing your home loan through the cancellation process
Introduction
What happens next?
Costs and fees
Settlement figure
Managing your
home loan through
the cancellation
process
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Benefits, Rewards & Freebies (continued)
eBucks
eBucks members who have a home loan, can
collect reward level points which can help them
move up the reward levels and earn more eBucks!
Visit www.eBucks.com for more information. Terms,
conditions and qualifying criteria applies.
Will
If you availed of our Will option to protect
your family and your assets, remember the
importance of updating your Will following
this cancellation if there is any impact to your
Last Will and Testament. If you are no longer
a Home Loan customer you could forfeit your
free safe custody of a Will.
Visit our website for more information.
Quick Sell
The Quick Sell Plan (QSP) is a private sale option that enables you to sell your property voluntarily in the shortest possible
time and allows you to move forward with your life, or clear off a debt burden that you can no longer service. Customers
who agree to the QSP are asked to sign a mandate, to provide FNB’s chosen estate agent with the relevant information
on the home, to allow access to FNB’s appointed estate agent and potential buyers and to ensure that the property is
marketed and sold in the quickest possible time at the best achievable price. This greatly reduces the time and expenses
of the usual recovery processes.
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Introduction
What happens next?
Managing your
home loan through
the cancellation process
Benefits, Rewards & Freebies
Property Leader
Costs and fees
Settlement figure
Managing your
home loan through
the cancellation
process
Important
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Buying a new home is never an easy process, but with our Property
Leader concept, we can guide you through the home buying and
selling process and assist you every step of the way. FNB Home
Loans have developed an extensive property database of unique
property transactions. What makes it unique is that FNB has
physically inspected and measured these properties, and is able
to determine physical differences when comparing properties.
This means FNB can help you make informed decisions about your
property.
Property worth
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Estimated valuation calculator
Area reports
Property reports
How can I increase the value
of my property?
• Costs associated with selling a house
• Help if you need to sell your
property urgently
Sell property
• Setting the right price
• The condition of your home
Prepare to sell
•
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Considering offers
• Key points to consider
• Occupational rent calculator
Sign purchase
agreement
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Customisable move checklists
Key jargon explained
Move home not your Home Loan
Transfer process
Affordability
We can help you determine affordability, and provide you with a
free Pre-approval, a document that gives you freedom to shop for
a home in your price range. Register for Property Leader on
www.fnbpropertyleader.co.za
Should you not already have the following tips will help you!
• For salary earners, a salary slip will usually be proof of income.
• If you are self-employed, 3 years of comparable statements as
well as 6 months’ bank statements or income statement signed
by your accountant may be required.
• When married in community of property, a joint application will
be required when applying for a loan.
Refer to www.fnbpropertyleader.co.za for more information.
Finance upfront
• Pre-approval online
• Access via social media
• Calculator
• Costs to consider
Find a property
Make an offer
• Repayment calculator
• Tips on making a good offer
• Occupational rent calculator
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Maps
Area reports
Property reports
Properties online
Property and area checklist
Get a Home Loan
Taking ownership
• Registration process
• Customisable move
checklists
• Online cancellation notice
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Key jargon explained
Home Loan types
Move home not your Home Loan
Apply online
Track your application online
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Managing your home loan through the cancellation process
Introduction
Home Owners Comprehensive Insurance (HOC)
What happens next?
Home Owners Comprehensive Insurance Cover premiums linked and paid from the home loan account, will be
re-directed on cancellation of the bond.
Costs and fees
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Managing your
home loan through
the cancellation
process
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Owning a house also implies several financial obligations and the importance of taking out HOC should not be underestimated. Residential properties are
prone to damage from fires, flooding, burst geysers, plumbing and natural disasters, and HOC is therefore absolutely essential as it covers these damages
and losses to the property.
Why is it important?
The property is no longer security for the Bank once the bond is cancelled in the Deeds Office. As such, it is no longer a requirement that you take
adequate HOC cover for the duration of the loan. The decision as to whether or not you choose to insure the property following the cancellation resides
with you if the loan is fully repaid. Not insuring your property means that you will no longer be covered against risk of loss or damage.
HOC impact once your home loan is paid up and cancelled
The following applies for OUTsurance HOC premiums through the home loan, on cancellation of the bond:
A
B
If the property was sold, then we will
arrange for the cancellation of the HOC
with OUTsurance. In the event of annual
premiums, a pro-rata refund will be
refunded to you.
If the property is not sold, you have the choice of continuing with the policy. There is no
longer a requirement by the Bank for the property to be insured. If you decide to continue
with the insurance, the premiums will need to be redirected to a transactional account.
You will be required to manage this process to ensure that the property remains covered.
It is however in your best interest to ensure your property remains insured.
In instances where the HOC is underwritten by another insurance company (not OUTsurance); the onus is on you to advise the
underwriter accordingly.
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Managing your home loan through the cancellation process
Introduction
Life Assurance
Life Assurance linked and paid from the home loan account, will be cancelled on cancellation of the bond.
What happens next?
Why is it important?
Costs and fees
Settlement figure
Managing your
home loan through
the cancellation
process
Important
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Life Assurance insures the bond holder in case of death. Life Assurance may be a condition to FNB granting you the home loan, which insures the
bond holder in the case of death. The bond amount may be paid out in full and the money left over will be paid to the beneficiary, so your loved ones
are not left with a debt burden.
An additional benefit (if incorporated into the policy) will insure the bond holder in the event of permanent disability, incapacity, critical illness or
retrenchment, the bond amount may be paid out in full and the money left over will be paid to the estate. (This is dependent on whether the event is
permanent disability, incapacity, critical illness or retrenchment).
If you opted to take all the FNB Mortgage Protection Plan, the policy will be cancelled on date of cancellation of the bond.
In the event that you cancel your home loan, and the life assurance repayments were being financed through the home loan, you will now need
to arrange for the premiums to be redirected to a transactional account. You will be required to manage this process with your life assurance provider.
Any cession held by FNB will be released on cancellation of the bond. Your financial advisor will be in a position to reassess your financial needs.
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Managing your home loan through the cancellation process
Introduction
Accessing funds on your home loan whilst under cancellation
What happens next?
Once the Home Loan is under cancellation you will no longer be able to view or access the Flexi Option online via our
Internet Banking channel.
Costs and fees
Settlement figure
Managing your
home loan through
the cancellation
process
Important
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You will no longer have access to any funds whilst your account is under cancellation as the settlement figures have been issued over the
existing property for the transaction to proceed. This ultimately means that no monies will be advanced as this will impact the settlement
figure issued. Flexi Option, Prepaid Option, Readvance, Future Use Withdrawal and Further Loans are all options that will not be available
whilst the loan is under cancellation.
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Managing your home loan through the cancellation process
Introduction
Statements
What happens next?
Statements are produced bi-annually on posted statements and quarterly on e-mail statements. If you require a statement sooner, you may
request an interim statement from our Contact Centre or access your statement online. You will receive a closing statement for your home loan
once the account is closed.
Costs and fees
Repayments
You will be required to continue making repayments whilst the home loan is under cancellation.
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Managing your
home loan through
the cancellation
process
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1. Debit Order
2. Salary Deduction
If your home loan repayments are made via debit order, the final
debit order on the home loan will be retained for a period of 40
days after cancellation of the bond. This is necessary to mitigate
the risk of a debit order being reversed after the cancellation
refund has been paid out and the home loan is closed.
If you pay your home loan through a salary deduction, you will
have to notify your employer once the home loan is cancelled
to amend your salary deductions.
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Managing your home loan through the cancellation process
Introduction
Paid-off home loan
A Paid-off home loan is when you have repaid the loan prior to the term of the loan being reached.
What happens next?
Costs and fees
Settlement figure
Managing your
home loan through
the cancellation
process
Important
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Paying your loan off prior to the end of the term is a major milestone, but did you know that this does not mean that your bond is cancelled? If you would
like to be in possession of your Title Deed, the bond must be cancelled in the Deeds Office and there is a cost associated to the cancellation of your bond,
payable to the Cancelling Attorney appointed.
Some customers decide to keep the home loan account open after the debt has been paid in full specifically for insurance purposes. This is actually not
necessary and in the long run costs you additional money, as interest is charged on the outstanding balance, even if it is for insurance purposes. The Bank
therefore continues to incur costs for the administration of the account, and these costs are recovered from you in the form of a monthly service fee. In
order to decide on whether it is beneficial for you to keep the account open, below are some points to consider:
Do you still require access to funds from your home loan?
Please note that should you require access to funds from your Paid-off home loan, the following applies:
Retain the Home Loan account for possible use in the future and continue to fund the Home Owners Comprehensive Insurance Cover
from the home loan account or redirect premiums to your transactional account. You may choose to retain your account as “paid up but
not cancelled” to avail of monies from your home loan account in the future. This option is only available where the remaining term of the
loan exceeds 24 months, and a debit order is in place. You may wish to retain the Home Owners Comprehensive Insurance Cover being
funded annually or monthly from the home loan account to ensure the property is adequately covered against potential loss or damage.
You may choose to redirect the premiums to your transactional account, which can be arranged through your insurer. The loan will attract
a monthly service fee.
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Managing your home loan through the cancellation process
Introduction
What happens next?
Costs and fees
Settlement figure
Paid-off home loan (continued)
Flexi Option on a Paid-off home loan
In the event that you have a Flexi Option on the home loan
account, the Flexi Option will be made inactive and you will
need to contact us when access to funds is required. We will
then reactivate the Flexi Option. There will be criteria that
must be met for you to qualify to access the Flexi Option on a
Paid-off home loan.
Prepaid funds on a Paid-off home loan
In the event that you require prepaid funds, there will be
no credit approval required, however there will be criteria
that must be met for you to access prepaid funds on a
Paid-off home loan
Managing your
home loan through
the cancellation
process
Do you no longer require access to funds from your home loan?
Important
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Should you no longer require access to funds from your home loan account, we recommend you cancel your loan. Although the account is paid up,
the facility is still in place with the Title Deed in our possession. The Bank therefore continues to incur costs for the administration of the account,
and these costs are recovered from you in the form of a monthly service fee, until such time as the bond is cancelled in the Deeds Office.
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Managing your home loan through the cancellation process
Introduction
Matured Loan
What happens next?
Making your final payment to your home loan is a major milestone, but did you know that this does not mean that
your home loan is cancelled?
Costs and fees
Settlement figure
Managing your
home loan through
the cancellation
process
Important
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If you would like to be in possession of your Title Deed, the bond must be cancelled in the Deeds Office and there is a cost associated to the cancellation,
payable to the Cancelling Attorney appointed.
A matured loan is defined by the loan reaching the end of the original term agreed when the full loan amount
should be repaid.
For instance, your 240 months of your 20 year loan has expired, and the loan balance is R0.00. When the loan has matured, the home loan account will be
closed, however, you will still be required to cancel the bond in the Deeds Office. The normal cancellation process will be followed. If for any reason there is
still a balance outstanding at time of maturity, the full outstanding balance becomes payable.
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Important Numbers
Introduction
FNB
Credit Bureaus
Insurance Companies
Claims and Policy Services
TransUnion:
Tel: 0861 482 482 / www.transunion.co.za
FNB Insurance Brokers
Tel: 0860 333 381
Experian Bureau (Pty) Ltd:
Tel: 0861 1056 65 / www.experian.co.za
OUTsurance
Tel: 08600 60 000
www.fnb.co.za
What happens next?
Costs and fees
Settlement figure
Managing your
home loan through
the cancellation
process
Important
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FNB Home Loans:
Tel:
087 730 11 44 or
E-mail:
[email protected]
FNB Home Owners Comprehensive
Insurance Cover Substitutions or Annual
Renewals:
Fax:
0860 362 125 or
E-mail:
[email protected]
eBucks:
Tel:
087 320 3200 or
E-mail:
[email protected] /
www.eBucks.com
FNB Trust Services:
Tel:
0860 102 763 or
E-mail:
[email protected]
Regulators
National Credit Regulator
Tel: 0860 627 627 / www.ncr.org.za
Tribunal
Tel: (012) 683-8140 / www.thenct.org.za
Banking Ombudsman
Tel: 0860 800 900 / www.obssa.co.za
Contact details for complaints processing FNB Home Loans
(A business unit of FNB, a division of FirstRand Bank Limited, Reg. No. 1929/001225/06)
FNB Home Loans Executive Office. No. 1 Enterprise Road, Fairland, 2194
Tel: (011) 369-1115 / E-mail: [email protected] / www.fnb.co.za