Various methods of financing a property purchase are available to investors in South Africa. Below is an outline of the options currently on offer.
Property investors in South Africa are limited to a mortgage of 50% of the purchase price, unless they have previously imported finance to purchase a property. Mortgages are widely available from several institutions and can be fixed or variable, as well as the more unusual option of BA SAFEX rate mortgage, which is normally open to large-scale investors only.
Self-certification mortgages are not offered in South Africa and with current mortgage interest rates at 12.5% in South Africa, we recommended that investors finance their property purchase externally.
The promoters of off-plan properties often offer advantageous finance packages to investors, which are well worth investigating. However in South Africa it is important to conform to the South African Reserve Bank rules for non-resident investors. We strongly advise you to consult a lawyer, a reputable agent with experience in the area and even a financial advisor. We have a panel of independent financial experts who can help you make an informed choice when investing in South Africa.
Through equity release it is possible to finance your overseas investment without having to sell your property or move home. If you are a property owner and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who will help you raise the necessary finance for your investment in South Africa.
If you are in your mid-50s or older and own your own home, you may be able to get a cash lump sum, a regular income, or both, by using an equity release scheme based on the value of your property. These schemes can be helpful in certain circumstances to raise funds for a mortgage to finance your South African property investment.
It is impossible to categorise everyone therefore some investors will need to obtain finance through a different route from equity release or mortgage options. There are alternative borrowing facilities available to investors in South African property.
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