03 April 2024: When you purchase a home, the bank performs a valuation to determine if the price being offered for the property is market-related, this verification process ensures that you are not overpaying for a property that you are looking for or underselling it as a property owner.
Angela Glover, Head of Product at FNB Home and Structured Lending says, “A valuation will either take place physically, by a professional valuer viewing the property, or virtually, using industry data and predictive models. The valuation undertaken by the bank is to determine the market value of the property and does not include identifying any defects or structural concerns.”
Assurances regarding the quality of the house can be gained by engaging with a professional inspector, engineer, or architect, who can carry out an inspection. An inspection, which you can arrange for on your own account, checks for defects in the property, structural issues, or quality concerns. An inspection is a good idea to give you peace of mind and confidence in what you are buying.
“You will also notice on your mortgage loan agreement that there are different valuation amounts, depending on the purpose,” adds Glover.
Purchase price: This is the value that you are paying for the property.
Replacement value: In the event that the property is completely demolished due to an insurable event, the full and current cost of replacing the building, together with additional costs, have been accounted for – this value is used for insurance purposes.
These values relate specifically to the property and structure, not to be confused with home contents, which relates to what is inside the house. Insurance for home contents is separate from Home Owner’s Cover (Building cover).
“The bank also offers valuations on request, which consumers can arrange via the FNB App. You might want to arrange such a valuation after doing renovations or before selling, to get to a market-related value. These valuations attract a fee, details of which are available on the FNB website. You can also get a free value estimate on our App via nav»Home,” concludes Glover.
High-Fructose
National debt: South Africa’s debt to GDP ratio is 48%. Compared to the USA (100%), Japan (200%), and the UK (90%) South Africa does not do too badly in this department. The World Bank recommends a ratio of 60%. With reasonable debt levels the likelihood that the government is able to repay its debt is high and that its fiscal policy is sustainable. This is conducive for starting a business in South Africa, knowing that the government will still be able to continue spending and thus stimulate the economy.