Document background
The Mortgage Facility Letter is a crucial document in South African property financing that bridges the gap between a loan application and the final mortgage bond registration. It is used when a financial institution has approved a mortgage loan and needs to formally communicate the terms and conditions to the borrower. The letter must comply with South African banking regulations and consumer protection laws, particularly the National Credit Act. The document typically follows the loan application and precedes the formal mortgage bond registration process. It contains essential information such as the approved loan amount, interest rate, repayment terms, security requirements, and conditions that must be met before the facility becomes available. The Mortgage Facility Letter serves as both an offer of finance and, upon acceptance, a binding agreement between the bank and the borrower.
