If you have been paying extra into your home loan and have settled it before the required date
you need to decide whether you wish to keep the mortgage bond in place.

The home loan is the credit facility that the bank grants, while the mortgage bond refers to the legal agreement that is in place and the bond is registered at the Deeds Office, although for practical purposes people use the terms interchangeably.

If you cancel the mortgage bond, you receive back your title deeds and close the home loan credit facility. If you ever wished to take out another mortgage on the property you would have to reapply and register for a home loan with all the usual costs.

Alternatively, you could keep the mortgage bond and the credit facility available. This then means that you delay your cancellation to a later date, either when you want to sell or at the end of your 20-year term. If you have no funds owing there will be no interest paid, but there will be a monthly service fee.

If you are simply paying off the home loan and not cancelling no notice is required. You are able to transfer any funds into your home loan at any time and can access those pre-paid funds immediately should you need them.

If however, you wish to cancel the bond, then you will be required to give the bank 90 day’s notice of your intention. The bank will then assist you through the cancellation process which involves providing final settlements figures as well as consulting with bond cancellation attorneys, as the bond needs to be cancelled in the Deeds Office. If you are cancelling the bond your attorney will work with the bank to return your title deed to you. Attorney fees will apply.

Having no debt on your home is a great goal, but a home loan facility is the cheapest credit available.
#homeloan #bond #mortgage #creditfacility

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