Questions
Questions, honestly answered.
Plain answers, in the same words we use in your agreement. Where an answer is still being confirmed, we say so.
The loan
- What is this?
- A home equity loan secured against your home, typically over an eight-year term, for homeowners typically aged 65 and over. You borrow against your home, you remain the owner and continue to live in it during the term, and interest is added to the balance until the loan is repaid.
- Do I make monthly repayments?
- No. You make no monthly repayments during the term. Interest is added to the balance until the loan is repaid, including after payments to you stop.
- How is the amount worked out?
- The amount advanced is typically a conservative share of the home's value, taking into account age, the value and location of the home, and the interest rate environment. Your personal illustration shows the figures for your home.
- How do I receive the money?
- You can typically receive monthly payments or, subject to assessment, an upfront lump sum. The monthly amount increases by 5% each year during the term.
- What does it cost?
- An initiation fee of R 5 550 and a monthly fee of R 69, both added to the balance. Interest is added to the balance until the loan is repaid. Every cost is shown to you, in rand, before you sign anything.
- What happens at the end of the term?
- The loan typically runs for eight years and is repayable at the end of the term. In the later years of the term we usually review the position with you so that you can plan ahead. Any continuation beyond the term is subject to that review.
- Can I repay it earlier, or sell my home?
- Yes. The loan is repaid when you sell, or when you repay it from other funds. Early-settlement terms are set out in your agreement. [early-settlement fees] to be confirmed.
- Could I end up owing more than my home is worth?
[This is being confirmed by compliance.] We will publish the position here, and it is written into your agreement.
You and your home
- Do I still own my home?
- Yes. You remain the registered owner and continue to live in the home during the term. We are a lender, not a buyer. The loan is secured against the home in the ordinary way.
- Can anyone else move in, or can I rent it out?
- Tell us before you do. Letting or changing who lives in the home needs our consent. [conditions] to be confirmed.
- What if I want to move?
- You can sell the home and repay the loan from the proceeds, or repay it from other funds. Tell your case owner early so we can plan it with you.
You and your family
- Can my family be involved?
- Yes, and we encourage it. Family is welcome at every step. With your permission, a son, a daughter or anyone you trust can join every conversation.
- Can my family see my information?
- Only after you have given your recorded consent. Acting for you needs a power of attorney or curatorship.
Looking after yourself
- What if my health changes?
Tell your case owner; we will look at your options with you. [hardship and vulnerable-customer policy] to be confirmed.
- What if I move into care, or die?
The loan is repaid from the sale of the home or from your estate. Families tell us this is their biggest question, and we answer it in writing. [estate process] to be confirmed.
- Should I take advice?
- We encourage independent advice before you decide, and your family is welcome to join you. Your agreement states the terms in full.
The questions families ask
If you are helping a parent decide
- “They will lose the house.”
- Your parent remains the registered owner and continues to live in the home during the term. We are a lender, not a buyer. The loan is secured against the home in the ordinary way and is repaid at the end of the term.
- “The interest will eat everything.”
- Interest is added to the balance until the loan is repaid, including after payments stop, and we say so plainly. The illustration shows the balance and the home's value at the end of the eight-year term, and the position if the loan remains outstanding after that.
- “There will be nothing to inherit.”
- Some of the home's value will be used, and that is the point of the product. It is your parent's value to use. The illustration shows how much, over the term and beyond it, so you can see the figures rather than guess.
- “What happens when the eight years are up?”
- The loan typically runs for eight years and is repaid at the end of the term. We usually review the position with your parent in the later years, so there is time to plan. We do not promise anything beyond the term, and we say so.
- “Who are these people?”
- Kinstead Home Equity (Pty) Ltd is a registered credit provider. Our board, executives and funders are named on our website. The NCR register shows our registration, and our complaints process is set out in plain words.
- “Why not just sell and downsize?”
- For many people that is the right answer, and we say so. Selling has costs and means moving. This is for people who want to stay for now. We encourage your parent to take independent advice before deciding.
Next step
Still unsure?
Ask us. A person will call you within one working day, and there is no obligation. Or read an illustration for your home.