Frequently asked questions
All you need to know to understand Bridging Finance!
Bridging Finances can most easy be described as a type of short-term fund advance to be paid back. Bridging Finance is always secured against a sum of money an applicant is due but awaiting finalisation and pay-out.
Property Bridging Finances is an interim fund advance due to a seller of a property. It gives property Owners access to money quickly to cover expenses (possible a dream home, school fees, living costs, etc) while waiting for a property transfer at the Deeds office to be completed. Repayments on a bridging finance advance are calculated on a fee from date of payment of funds to the repayment date. Repayment can occur once the transfer of a property has been finalised and the sellers have received their payment for the property. (equity) through a transferring attorney. The attorney will transfer the funds directly into the company account.
Equity is the profit from a sale; the funds due to the seller of an immovable property like a house.
In South Africa, the Deeds Office is responsible for the management of property registry. It coordinates the transfer of a sold property from the sellers name to the buyers name.
A settlement statement is an accounting document indicating the total fund amount that needs to be paid to the lenders at the end of a Bridging agreement. Once a transaction is registered in the Deeds office, the registering attorney will request a settlement amount. This will appear on a statement and the following amounts reflected:
- The capital amount advanced ;
- The discounting fee;
- The discounting rate and;
- The period over which the bridging advance was taken
The Capital amount is the exact amount of money being advanced to a client. It is the actual amount of money that will reflect as paid into the person bank account who is requesting bridging finance. This will be done via an attorney.
This is the amount agreed upon by the Bridging Finance company and client which will be paid back on top of the capital amount advanced. This amount is like a service fee that is agreed upon for the Bridging Company’s services. It is known as a discounting fee.
A discounting rate is the amount agreed upon that the client will need to pay to the bridging loan company and is usually calculated on a monthly basis. These figures make up the discounting fee.
Estate Agent Commission Advance is the easiest way to describe this service. Basically, you as the agent are looking at receiving commission from a property sale before transfer of the property has been concluded at the Deeds Office.
We offer you a service of advancing funds due to an individual based on a divorce agreement awaiting final registration in court. This amount is calculated based on the cash amount being divided between the two individuals.
It is the agreement drawn up between two adults who are choosing to separate. The agreement clearly details the division of belongings between these individuals and includes the cash portion as well.
This is the agreement signed between the bridging finance company and a client indicating the capital amount to be advanced, the discounting fee and discounting rate.
Transfer Duties is a Tax that needs to be paid to the Deeds Office and is calculated in relation to the property value.
Transfer Fees are paid to a transferring attorney, appointed by the property’s seller to transfer ownership to the purchaser. This cost varies, depending on the purchase price.
032 815 1114