4. Access Bond
Please note that due to the current economic climate many lenders have tightened up on their Access Bond facilities
Access bonds have been developed over the last few years, and now almost all of the banks offer them. They act as a facility on top of your mortgage so that you can draw into them, and effectively use it as an overdraft facility.
Nedbank's 'Ned-revolve' product is the only bank / product where the client has to physically contact the bank to ask them to reduce their monthly repayments. All other banks the monthly repayments will go up and down depending on how much the loan is.
Tips for the client
Read about a capital deferment mortgage
This is an excellent product for business owners, as it gives them the flexibility of an overdraft facility but at far cheaper rates than a business overdraft facility.
If clients are looking to renovate their properties, then the access bond is perfect. It allows them to pay for the work as and when it is done, without having to pay the interest on a full mortgage.
Always advise the client to take as high a 'grant' as possible, this means that even though they will only get paid the amount they have requested, the additional grant amount can be applied for without having to go through credit checks and a full application again.