Invest in property – using your portfolio as collateral
Investments / 2017.08.25

Invest in property – using your portfolio as collateral

Taolo Morake Head of Credit

You’ve seen the perfect investment property, and it’s an opportunity you can’t miss. The problem is – you just don’t have the capital immediately available to ensure it doesn’t slip through your fingers. Taking out a mortgage loan from a bank could take weeks, and you really don’t want to liquidate a portion of your investment portfolio to create the required funds. At Sanlam Private Wealth (SPW), we offer you the option of using your existing assets to gain fast access to capital – within 48 hours.

As the saying goes, opportunity is a bird that never perches – so the last thing you want is the onerous and often drawn-out process of obtaining credit through the usual channels. Whatever your investment property needs – a beach house you’ve been eyeing that’s come onto the market, a new development you want to invest in, a flat for your children attending university, or a first home for your 20-somethings – you don’t want to let these opportunities pass you by.

As an SPW client we can offer you the option of using the qualifying assets in your investment portfolio as collateral for both the initial guarantee to the transfer attorney and/or a loan for the sale price of the property. The service is fast and flexible, and offered at competitive rates.

How does it work?

We can provide the transfer or conveyancing attorney a guarantee for the amount to be paid for the property – up to 50% of the market value of your investment portfolio. Then, at the time of transfer (usually after a couple of months), you have the option of either making your own funding arrangements to settle the sale price, or you can convert the guarantee into a loan, again using your existing portfolio as collateral.

What are the benefits?

  • Fast access to a guarantee and a loan product. Since we already have an established business relationship with you, we can quickly assess the collateral requirements and approve your loan within 48 hours.
  • Competitive rates. Our rates are linked to the prime interest rate (an advantage in a declining interest rate cycle). In addition, when compared to other credit channels, there are no upfront costs, or origination, service or cancellation fees involved.
  • Flexible payment terms. Interest is calculated and capitalised monthly, using the daily outstanding balance. There is no requirement to service the interest on the loan, as long as the total outstanding balance remains within our 70% loan-to-value requirement.
  • No fixed loan period. You can repay your loan at any time, with no penalties. For example, many of our clients use their annual dividend income to reduce the balance of their loan, or pay it off, with no extra costs, as soon as they have the funds to do so.

Before the bird flies away …

Of course, you don’t need to make use of our fast credit offering only to buy an investment property. Equally, you may want immediate access to capital to:

  • invest in a great business opportunity
  • pay your provisional tax bill
  • provide bridging financing for business and other projects
  • pay for big-ticket expenses such as weddings or overseas trips.

If you’re interested in SPW’s quick turnaround credit service, contact your portfolio manager, or the SPW branch nearest to you.

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