Property law


Posted by: Paul | 2015/07/15 05:33

What would be the best way of going into co-ownership of my mother's house with her existing bond?

My mother bought her house around 9 or 10 years ago for just under R900 000. The house is now valued at around R1.6 million and she owes about R800 000 on her bond. They are thinking of relocating and whish to purchase another house, but do not want to sell the current house and loose out on it's great financial growth potential. However with the current bond on their name they do not have enough income to apply for the second bond. She has approached me and asked if I would like to buy into the house effectively obtaining a bond of R800 000, to settle their bond and freeing them up to acquire the new bond. We would then be co-owners of the house 50/50 and I would be repaying my R800 000 bond. My question is 1 Can we do it this way? Would a bank or financial institution grant me a loan under these circumstances? (Am I also right in assuming no transfer costs needs to be paid, my name will just be added as a co-owner on the deed?) 2) Is their simply a way of taking over the bond from my mother that the outstanding amount reverts to me? The house can be transferred to me aswell we will still enter into a contract of being 50/50 owners. 3) Is it possible to set up a trust and transfer the house to it. Once again would I be able to apply for a loan and then take over the R800 000 outstanding on the bond from my mother? If none of these options are viable: 4) If I enter into a long term rental contract with my mother and not buy into the house, but basically cover their bond repayments. Will they be granted a loan for the second house with this added income? Thank you in advance

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