A Fin24 user wants to get rid of the co-applicant she has on her bond, but is puzzled by the reaction she got from the bank. He writes:
In 2011 I applied with my younger sister as co-applicant for a bond with FNB, since I could not otherwise afford it at that time.
I started bond repayments in about April 2012 and continued up to the present.
Now I want to remove the co-applicant and the bank told me to fill in an application form, which I did and submited it.
The bank now wants me to start from scratch and pay off the bond over a period of 20 years or 240 months.
I have already paid for more than 27 months. Are they allowed to do this?
What about my two years of payment? Do I forfeit that, although I was anyway the one who was paying?
Monde Motha, channel manager at FNB Home Loans, responds:
The application form that you are referring to is called a substitution of debtor.This application form generally applies when a debtor(s) applies to take ownership of the current bond into his or her name only.
The above application is seen as a new application and a full credit assessment is conducted solely on the applicant to verify affordability.
The old home loan facility will be closed down and a new one opened under the new name.
Clients can advise their bank of the terms they wish to proceed with.
In this instance, I suggest you contact the bank to firstly understand the reason why the application was approved over a longer term.
Find out if it would be possible for the term to be restructured at 213 months remaining instead of 240 months as indicated.
It is probable that your application has been approved at a higher term of 240 months to assist in qualifying for the bond.
- Fin24
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