Frequently Asked Questions

When making the decision on taking out a loan, it is only natural to have some questions, let us answer them for you.

How is HiP different?

Besides our offerings which are different, the most significant difference is our approach to home loans. It is crucial for us not to sell you a product but rather to partner with you in securing one of the most valuable assets, your home.

We assist in financing the right home, which suits your future earning potential. At HiP Housing, we supply you with the vital information needed to make the most informed decision for your purchase.

What do I need to qualify?

To qualify for a home loan with HiP you must be:

  • In full time employment (not self-employed)
  • Employed by your current employer for at least two years
  • A South African citizen
  • Between the ages of 21 and 40. Older ages may also apply and are considered on merit
  • Earning a gross income of between R3 500 and R30 000 per month
  • Cleared by the credit bureau
  • Wanting a loan between R250 000 and R950 000

What are the benefits of HiP Home Finance?

When you decide to get your financing through HiP, there are benefits for you to enjoy:

  • Improved affordability
  • More home finance than through conventional offerings, both sooner and with a lower initial repayment
  • The affordability is maintained throughout the entire term of the agreement
  • Repayments are predictable and at a fixed percentage of your salary – not exceeding 30%, for the duration of the loan
  • Access to finance for those who otherwise would not have qualified due to affordability
  • Consideration of your future earnings stream
  • Repayments are escalated in line with your salary increase annually
  • Your repayments are not impacted by changes in the interest rate.

What documentation must I submit to HiP in order to process my application?

  • Fully completed home loan application form
  • Copy of your identity document
  • Copy of signed offer to purchase
  • Last 3 months bank statements, original and stamped
  • Latest salary advise ( not older than 3 months )

How can I apply or obtain further information?

For further information on HiP’s offerings or to apply for a home loan, Complete the call me back form on our website: www.hiphousing.co.za

You can also send an email to admin@hiphousing.co.za or call HiPs Customer Contact Centre at 086 1123447

What is my overall contribution in all this?

  • Where conveyancing costs are not included in the purchase price you will need to pay the conveyancing costs associated with the registration of the property.
  • A once-off initiation fee is needed to be paid once your application has been approved. You will also be liable for a monthly service fee. All costs are in line with the requirements of the National Credit Act.
  • Home Owners Comprehensive (HOC) insurance is compulsory. HOC protects you against damage to your property.
  • Life Cover for the primary borrower is not required as it is paid for by HiP to ensure that your loan is settled in the event of untimely death of the primary borrower. Secondary borrowers will be responsible for taking out their own Life Cover and ceding it to HiP.

Is there an early termination fee for cancelling a bond?

When requesting a settlement letter an early termination fee will always be applicable. This is provided for by the National Credit Act and will be documented in the Mortgage Loan Agreement.

Do you receive any concession when settling a bond early?

We’d like to say yes, but unfortunately you don’t receive any concessions when your bond is settled or cancelled. The interest is calculated on the term of the loan and the bond is taken over a 20 year period.

Are there any implications should I not settle the bond in 90 days?

After 90 days the settlement letter will expire. A second letter is drawn up when the first expires and interest is charged on a daily basis on the outstanding balance. We advise you to start the switching or selling process from the date of the first settlement letter to avoid further interest being added.

What Costs are included in the Early Settlement Amount?

The settlement amount is made up of the outstanding balance, a one month bond instalment, the early termination fee and the service fee. The one month bond instalment is only included in case the bond cancellation at the Deeds Office that results in the receipt of settlement funds, does not occur in 30 days, otherwise it is refundable

Must I continue paying my debit orders during the cancellation process?

Yes. To avoid the bond running in arrears, debit orders must be kept up to date. We immediately stop the debit order with your bank as soon as the full settlement is received.

Will I get any refunds after the settlement?

In most cases refunds are due back – this is depending on the settlement amount received. The reconciliation of your account only gets done after all the money is received. If a refund is due, we will pay it back to you, our client. However, if there are any shortfalls on the settlement, you as the client will be held liable to pay the shortfall amount.

How long does HiP take to reconcile my account once I have paid the settlement amount?

At HiP we take approximately ten working days to finalise your account and pay any refunds due to you, provided proof of banking has been received from you.

How does the HiP Salary Linked Home Loan Product work?

The HiP Salary Linked Home Loan is structured in such a way as to enhance affordability for low to middle income customers. The initial repayment instalment is lower than what the customer would have paid for a conventional home loan with other lenders. The repayment instalment does not increase when interest rates increase (or decrease when interest decrease). The repayment instalment however increases every year at the same percentage that the customer’s salary would have increased. The repayment instalment increase will not exceed the prevailing inflation rate (Consumer Price Index) plus 4%.

Why does the Outstanding Loan Balance increase even if the Customer is paying the required instalments and is not in arrears?

The HiP Salary Linked Home Loan was deliberately structured to be affordable for low to middle income customers. This is achieved by initial lower repayment instalments than the customer would have paid for a conventional home loan with other lenders. These lower initial repayment instalments are not sufficient to pay off interest that is charged on the loan during this period. Therefore the Outstanding Loan Balance will increase by the portion of interest not paid by the required repayment instalment.

When and how will the Outstanding Loan Balance start reducing?

Depending on the interest rates levels over the loan period and assuming the customer has been consistently paying the required repayment instalments, the Outstanding Loan Balance should start reducing after 8-12 years. This is when the repayment instalment would have been increased sufficiently to be able to fully pay interest as well as a portion of the capital repayment. The period can however be longer if interest rates increase.

When does HIP increase the required repayment instalment?

The required repayment instalment is increased every year during the time that the Customer gets a salary increase. The Customer is therefore required to provide HIP with proof of salary increase every year. If the Customer fails to provide such proof, the required repayment instalment will be increased by the prevailing Consumer Price Index plus 1%.

In a joint mortgage bond, the required repayment instalment will be increased on the date that the Customer who receives their salary increase last (between the joint borrowers) gets their salary increase. The percentage increase of the required repayment instalment will be equivalent to the average salary increase of the joint borrowers.

What happens if a Customer does not get a salary increase in a certain year?

If the Customer proves that they did not get a salary increase in a certain year, HiP will not increase the required repayment instalment. However it is advisable for the Customer to then pay more than the required repayment instalment to reduce the likelihood of a balloon payment requirement at the end of the mortgage loan term. It is also advisable for a Customer to pay more than the required repayment instalment of any loan in order to save on interest costs.

What are the insurance policies that are required for the HiP home loan?

Two types of insurance policies are required:

  • Life insurance policy cover – HiP provides life insurance cover for all primary consumers (borrowers) only as part of the home loan package. Secondary borrowers are required to take out their own life insurance policy (minimum cover of 115% of the home loan granted – accidental cover is not acceptable) and cede it to HiP.
  • Home Owners’ComprehensivePolicy – borrowers are required to take out this insurance cover for the house that HiP has financed and has registered a mortgage bond over. This insurance policy protects the home owner from loss of their home due to risks such as fire, natural disasters, and storms etc.

What does the Life Insurance Policy taken by HiP cover?

The HiP Home Loan includes a Credit Life Insurance Policy Cover for the primary borrower.

  • The benefits of the HiP Home Loan Credit Life Insurance Policy are:
    • Death of Insured – HiP Home Loan amount outstanding is paid in full and the estate is released from the mortgage bond;
    • Retrenchment Cover – 12 monthly HiP Home Loan repayment instalments are paid on behalf of the Insured who has been retrenched;
    • Disability Cover – the HiP Home Loan amount outstanding is paid in full for permanent disablement such as paralysis or loss of limbs or 11 monthly HiP Home Loan repayment instalments are paid for occupational disablement;
  • The Policy however does not cover:
    • Intentional self- inflicted injury or Suicide;
    • Any injury that occurred, illness or condition that existed or surgical operation undergone during the 6 months immediately before the date on which the insured person first became an insured person, if he dies within the 12 months immediately following such.

What are the benefits of NOT defaulting on repayment instalments?

The benefits of not defaulting on repayment instalments are as follows:

  • The Customer’s acquired property (house) will not be foreclosed on and thus the Customer will always own their treasured property and have a roof over their heads and their loved ones;
  • No additional, unnecessary costs such as attorney’s collection fees and default interest costs are incurred;
  • PayingtherequiredrepaymentinstalmenttimeouslyensuresthattheCustomerhasacleancredit record and therefore highly likely to be offered additional loans elsewhere, at favourable interest rates;
  • There is a very low likelihood of a bullet payment requirement at the end of the mortgage loan term.

What are the consequences of defaulting on repayment instalments?

The consequences of defaulting on repayment instalments are as follows:

  • The Customer’s acquired property (house) might be foreclosed on and thus the Customer might lose their house;
  • Additional costs such as attorney’s collection fees and default interest costs will be incurred;
  • The Customer’s credit record will be negatively affected and they might be declined further credit at other lenders or be granted credit at higher interest rates;
  • There is a high likelihood of a bullet payment requirement at the end of the mortgage loan term or a shortfall payment requirement should the house be foreclosed on and re-sold.

Does HIP offer payment holidays?

Unfortunately HIP does not offer repayment instalment payment holidays. Repayment instalments should be paid on a monthly basis as agreed on the mortgage loan agreement.

Can HIP “take the house back”?

At no point does HIP own the house. HIP therefore cannot “take the house back”. HIP only provides home loan finance and registers a mortgage bond over the house, as security. The home owner buys the house from a seller through the Offer to Purchase. If a home owner does not want the house, HIP recommends that the home owner sells the house and pays back the home loan provided by HIP.

Are the responsibilities of the Primary Borrower and Secondary Borrowers different, in a joint mortgage bond?

Both the primary and secondary consumers (borrowers) are fully responsible for the home loan. Their obligations are the same. They should both ensure that repayment instalments are paid monthly and all other terms and conditions of the mortgage loan agreement are fulfilled.

What happens when one joint borrower requires to be released from the bond?

The remaining borrower will undergo a similar affordability assessment as at the beginning of the home loan. If the remaining borrower qualifies for the home loan (outstanding amount), the property will be transferred into the remaining borrower’s name and a substitution of debt process will be done. Both joint borrowers will be responsible for the costs incurred. However, if the remaining borrower does not qualify, then the joint borrowers will be required to pay off the home loan. This often entails selling the house.

How often are account statements sent?

Home Loan Account Statements are sent to customers on a quarterly basis. Customers are encouraged to always ensure that they provide HIP with their current electronic mail or physical addresses.

Contact details:

Address: Block E, 204 Rivonia Road, Morningside, 2196 P.O. Box 784531, Sandton, 2146

Telephone: 010 594 7777
Emails: admin@hiphousing.co.za – General Enquiries

collections@hiphousing.co.za – Home loan repayments, Instalment Increase Enquiries; hoc@hiphousing.co.za – Home Owners’ Comprehensive Insurance Policy Enquiries; lpa@hiphousing.co.za – Credit Life Insurance Policy Enquiries

Website: www.hiphousing.co.za

Can one joint borrower be replaced by another?

Yes. This would be treated as a new application for an amount equivalent to the current outstanding balance on the existing home loan. An application form with all the accompanying documents would be required and a full credit assessment would be conducted to establish whether the new joint borrowers qualify for the home loan. If yes, the existing home loan will be cancelled. The process of property transfer and new bond registration would take place. It should be noted however that while the said process is taking place, monthly repayments for the existing home loan would be required until the existing home loan is cancelled.

Can HIP extend the term of the mortgage loan in order to reduce the home loan repayment?

The maximum term of the HIP loan is 240 months (20 years). The term cannot be extended.

Create a comfortable home for your family.

Apply now and get more details.