Below are eight important matters to consider when selling your property:
1. BOND CANCELLATION AMOUNT
1.1 PENALTY INTEREST
Penalty interest is often overlooked and an important factor to take into consideration when calculating the expected proceeds on your sale.
All the major banks’ terms and conditions contain a clause that a borrower should notify the bank of their intention to pay the outstanding amount in full and cancel their bond. Make reference to the particular clause in your mortgage bond to verify the provisions applicable to your mortgage bond in this regard.
A typical notice period clause reads as follows:
The borrower will give the Bank not less than 90 (ninety) days advance notice in writing (or such shorter period as may be agreed by the Bank) of the date on which the borrower will pay the outstanding balance of the loan in one amount;
If the borrower failed to give the bank notice, then the 90 day period will be triggered by the transferring attorney’s request for cancellation figures.
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