Instalment Sale Agreement

[dnelson]

Hi Quinn and Dave A

I just found your discussion interesting as I have used this type of agreement a few times in order to get a bit creative with financing to cure the deposit requirements nowadays with NCA.

We find that the maximum permissible term is 24 months in South Africa.

If we consider that 24 payments over 2 years are seen as capital payments off the initial purchase price, at the end of the 24 month period, the purchaser can then approach the financial institutions and show the 24 months of capital payments being held in the conveyancers trust account and are usually substantial enough to cover the 20 - 30 % deposit required by the financial institutions to approve a standard mortgage bond on the difference between the initial purchase amount and the amount as now held in trust.It just means that instead of occupational interest or rental, the price of the property is increased by the amount lost over these 24 months as occupational interest and shown as capital payments to the conveyancers trust account.

sorry to but in.

Kind regards
Dale