THERE IS ANOTHER WAY TO FINANCE YOUR HOME
Finance your home through instalment sale instead.
What is instalment sale home finance?
Are you struggling to get a home loan? Today’s climate has made it difficult to obtain bond finance. Why not buy your home like you do your car – on instalment sale? Sentinel Homes is an alternative home financier to banks and other home loan providers serving the Western Cape and Gauteng areas.
You buy a house like you normally would: by finding one you will be able to afford and signing an offer to purchase. If your offer is accepted, you can apply to the normal financiers, such as banks, for a mortgage loan. If you do not qualify for the mortgage loan you require, then Sentinel Homes can help. Your mortgage broker or estate agent will send your application to our applications office for consideration. If approved, the process continues to the point where you move into your new house and the transfer is registered in the deeds office. Practically, there will be little difference from buying a house with bond finance, as you will still make monthly payments and live in your home.Apply Now
The difference is a legal one and relates to the process that is followed on default. There is little practical difference as long as you pay the instalments and comply with the loan agreement.
When you finance a house with bond finance, the house is registered into your name but the bank holds power over it through a legal instrument called a mortgage bond. If you sell your house, you cannot do it without first paying the bank. The bank can also insist that your house is insured, can repossess your house if you decline to pay the instalment, and has some other minor rights as well. Legally speaking, your name is on the title deed, together with the bank’s name, as holders of rights over the property.
In the case of instalment sale, your name will also appear on the title deed as a holder of rights over the property. The difference is that Sentinel Homes is legally the registered owner of the property until you have paid the final instalment.
As long as you continue to make payments of the instalments and comply with your other obligations in terms of the loan agreement, there will be virtually no practical difference from bond finance as you will still make monthly payments and live in your home.Apply Now
- The market value of the residential property must be above R400 000;
- The total finance granted must not exceed R2.9 million;
- The home must be located in the Western Cape or Gauteng. (This includes Estate agents and Bond originators);
- A minimum deposit of 5% of the purchase price is required;
- You should have a good credit record, without judgments or adverse accounts.
The costs involved are typically the same as when buying a property with bond finance. These costs include, but are not limited to, a deposit, transfer costs, transfer duty and insurance.
Finance is provided at competitive interest rates. A detailed quotation will be provided should your application be successful.Apply Now
What if I lose my job, become ill, pass away, or for some other unexpected reason cannot pay my instalment?
We encourage all our clients to take comprehensive insurance to ensure that the home finance is paid in the case of an unexpected life event. We offer some of these insurance products as a part of our finance offering, though you are free to take the insurance elsewhere. In instances where the insurance cover does not apply or is not sufficient, then an arrangement will have to be made with Sentinel Homes, which may include selling the home, settling the finance and paying the remainder over to you. This is also what would have happened with bond finance.Apply Now
By taking finance from Sentinel Homes you promise to look after and take care of your home much as you would promise with bond finance. You are free to sell your house at any time before the finance is repaid, as long as your selling price is large enough to cover your outstanding debt with Sentinel Homes. Bond finance works the same.
Instalment sale does differ from bond finance in some small and technical respects. Most noticeably, you will have to use the property as your primary residence unless you have our consent to rent it out.Apply Now
Housing finance in South Africa is regulated. In the case of instalment sale, there is an additional law that applies to the finance called the Alienation of Land Act. The Act does not apply to bond finance and provides additional safeguards for people who take instalment finance for their house. Even in the unlikely event of Sentinel Homes becoming bankrupt, which is the most extreme possible outcome, the law insists that you will be safe in your home as long as you continue to abide by the terms of the loan agreement and pay the monthly instalment.
Sentinel Homes is financed by the large South African financial institutions, who perform stringent financial checks before providing that finance. The chance of something happening to Sentinel Homes is therefore remote.Apply Now
We are the first South African company to offer an alternative to bond finance in the open market. The company is the brainchild of the team at Combined Finance, which has been operating in as investors and financiers in the real estate industry since 2013.
Renier holds the degrees Bachelor of Arts and Bachelor of Laws from the University of Stellenbosch. He is an admitted attorney with a background in corporate and property law. Renier has his sights set on broadening the availability of sustainable credit in the South African market, believing it to be the cornerstone of economic advancement. As such he has been involved in founding several finance businesses, the latest of which is Sentinel Homes.
Mathys holds a Bachelor of Commerce as well as a Bachelor of Laws from the University of Stellenbosch. He also obtained a Master of Laws at the University of Pacific, McGeorge School of Law (USA) with superior distinction. Mathys is an admitted attorney with a litigation background and currently the credit and risk manager and legal advisor of Sentinel Homes.