Do you want to learn about the Absa future bond in South Africa? Then check out this guide!
A future bond is a contract that entitles you to purchase a bond later at a price determined today.
The product is mainly used by speculators to bet on the price of a bond or to protect bond holdings.
You can request to register a higher bond amount than the minimum required at the time for future use.
We will start by showing you the benefits of this product.
What Are The Benefits
You get access to equity in your home loan for future use when the property value has increased; hence you can take a Further Advance.
You are able to save on bond costs because you won’t have to register a further bond in the future.
The product is convenient and has a quick turnaround time when you want further finance.
If your property value has not increased, you can apply for further finance to allow for equity.
Further finance can only be used for home improvement or extension that will, in turn, increase the property value.
These are the benefits of Absa’s future bond in South Africa.
Absa Future Bond
When taking a new home loan, you can request to register a higher bond amount than the minimum required at the time for future use.
Having a higher bond enables you to take up further finance without registering for a further bond.
Using the higher bond amount value depends on the increase in your property value and approval of a further advance.
You need to apply for the bond first, and then Absa will carry out a credit assessment and property valuation to process your application.
This is how the Absa future bond works in South Africa.
What Are The Features
We will now show you the unique features of this bond.
The bond allows you greater flexibility and convenience as you won’t have to register for a bond in the future.
You save time and money in the future by taking a further advance.
When you register a higher bond amount, it doesn’t mean that you will get a higher loan amount at inception.
The difference between the loan granted and the future bond amount is not automatically available for future take-up, but it will depend on the value of your property.
These are the features of Absa’s future bond in South Africa.