Mortgage Loan
TUHF specialises in mortgage lending for rental housing projects in inner city areas. Over 90% of TUHF’s business is mortgage loans which are given for the following kinds of projects:
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Purchase of small or large blocks of flats |
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Refurbishments of small or large blocks of flats |
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Conversion of existing buildings to residential |
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Purchase of a controlling share in a sectional title block of flats |
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New build blocks of flats for rental purposes |
These loans can be small (below R500 000) or large (up to R10 million). If a client requires a larger facility, TUHF arranges syndicate or joint finance with its commercial partners. Whether the project is large or small, clients enjoy the same expert advice, quick decision making and network of contacts.
A mortgage loan is an advance of funds from a lender to a borrower secured by real property and evidenced by a loan document. The mortgage sets forth the conditions of the loan as well as the manner and duration of repayment. The property involved in a mortgage agreement is transferred to the borrowing buyer's name at the beginning of the loan period. The property itself is also registered as security for the lender, against the loan, until it has been paid in full.
This process ensures:
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A seller, the present owner of a property, that the purchase price will be paid. |
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A buyer, who wants to own the property, that the purchase price can be raised. |
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A lender, usually an organisation such as TUHF, or a bank, that the loan will be re-paid over an agreed length of time and number of payments. |
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The lender reserves the right to use the pledged property to secure the full repayment of the loan if the conditions of the loan agreement are not met. |
TUHF will provide clients with a mortgage on condition that:
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It is re-paid, with interest. |
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That the money is sufficiently secured against real assets. |
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The borrower is a reliable person or organisation to lend money to. |
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The borrower signs a personal surety for the loan. |
TUHF only finances viable projects, projects which yield enough money to not only repay the loan with interest, but also to make a profit. TUHF works with the buyer to ensure that the project is feasible, the purchase price reasonable and that local market conditions are met.
TUHF charges interest and raising fees, at market-related rates, payable over up to 15 years (negotiated for each project). The financing is tailored to the specific needs of the borrower and obligations of the loan are fully explained. The security required is a mortgage bond over the property and full personal surety for the loan. In exceptional circumstances, the borrower can offer other investments, including other properties, to provide the necessary security (collateral security).
TUHF ensures that there is a good fit between the borrower and the building as well as between the financial demands of the purchase and the rentals that can be realistically expected. By doing this, TUHF is able to help entrepreneurs to access the residential property market.
TUHF will also encourage clients to develop their property interests, thereby enabling them to grow from part-time to full-time property entrepreneurs.
For Application Forms click here
