We often get asked to weigh in for clients on whether they should cancel their fully paid home loan, or how the process to cancel your bond when selling a property, really works.

Firstly lets discuss the question on when your bond is paid in full.

You may decide to keep open your home loan and keep the insurance with your bank, however some clients wish to have their title deed in their own safe keeping for record purposes.  The choice remains yours.

If you want to cancel your bond, you may attend to your bank or the attorney that the bank appoints to kick-start the process.

They will then let the bank know of your intention to cancel, after which the bank will issue the cancellation figures (what is still due to the bank) to the attorneys of their choice and send the deeds to that attorney.

The attorney will make contact with you on receipt of the instruction and obtain full FICA documentation from you, and hand over an account to you, which may vary from R 4 500 up, depending on how many bonds need to be cancelled.  After you make the payment, your documentation will be sent to the deeds office in your province, which will remove the Bond endorsement, and therefor “free up” your title deed again.  The process in the deeds office takes only about 7 days, but to have the deeds delivered back to your attorney might take up to 6 weeks.  Your attorney will require you to come to their office to collect and sign for the title deed.

Secondly, the process to cancel your bond when selling your property, the following steps should be taken.

1. Submit your notice of intention to cancel the bond to your bank.Have a look on your bank’s website.They have a specific email address to be used when giving notice to the bank of this intention to cancel.
2. The transfer attorney appointed by you in the deed of sale will then request cancellation figures from your bank.Be sure to have a copy of you bond account statement available for them.
3. The transfer attorney will ensure that they provide a guarantee to the cancellation attorney to show that the bond will be paid on date of registration.
4. Your cancellation fees will be deducted from your proceeds by the transfer attorney
5. The bank will close your account on date of registration of the transaction and send you a final statement.

It is important to note the following when it comes to cancellations:

The bank will always require a couple of rand more on your cancellation figures, and you will receive a refund from the bank, on date of registration.  To prove these banking details for your payment, the attorney will require a bank statement and a signature on the refunds instruction to the bank.

If your Home Owners’ Comprehensive (HOC) insurance is debited from your home loan account, you’ll need to transfer the debit order to a different account before your bond is cancelled. Failure to do so could cause your insurance cover to lapse, leaving you in a sticky situation if anything goes wrong.