BUILDING ON A BOND

The valuer checks the walls. Nobody checks the money.

On a building loan your bank pays the builder in stages — usually four to six — each one after its valuer has looked at the work. The valuer is there to protect the bank’s loan. Whether the house still comes in on budget is left to you, one signature at a time.

HOW THE MONEY MOVES

Each payment is a height on the wall.

The stages are agreed with the bank before a brick is laid — foundations, window height, roof, and so on. When the builder reaches one, you sign a progress payment form, the bank sends its valuer, and if enough of that stage is built, the money is released to the builder.

The drawing is the job at its third payment: everything hatched has been built and paid for; everything dashed is still to come.

You sign, the bank pays.: Each payment needs your authorisation on the bank’s form.
One form at a time.: Banks warn against signing a blank form, or asking for two payments at once.
The last one waits for the municipality.: The final payment needs the occupation certificate.
Interest starts with the first draw.: You pay interest only on what has been paid out so far.

Section, not to scale. Stages differ by bank and by build — yours are on your loan agreement.

THE GAP

What the inspection can’t tell you.

What the valuer checks

That the stage the bank is paying for is standing on site. Enough wall, enough roof, enough of the job to cover the money the bank has lent so far.

What nobody checks

Whether the job will finish on budget. A builder can reach every stage on time and still be spending the money for stage four on stage three. You find out at the end, when the loan is used up and the house isn’t — and the shortfall is yours.

BEFORE YOU SIGN

Six boxes, every payment.

Print it, or keep it on your phone. If a box won’t tick, ask before you sign — the bank pays as soon as its valuer is satisfied, and money paid is hard to get back.

Progress payment no. Homeowner’s check

1I have seen this stage myself, on site — not only in a photo. 2The amount is for this stage only, and no more work than is actually built. 3Every extra was agreed in writing, with a price, before it was built. 4I know what has been paid so far against each part of the job, not just in total. 5I am signing for this payment only. The form is filled in, not blank. 6If the bank lent less than the full cost, my own share for this stage is ready.

HomeownerDate

WHERE SITEMARGIN COMES IN

Box four is the hard one. That’s the one we do.

If your builder uses siteMargin

Ask for your progress page. Each trade on the job and how far along it is, issued by your builder and free to you. Hold it next to the progress payment form and you can see whether the stage you’re signing for matches the work.

Ask your builder on WhatsApp →

If you’re running the build yourself

The Home Owner plan is R899 once-off for one build: a budget for each part of the job, every payment set against the stage it pays for, money spent against work done, extras, a snag list and a handover pack at the end. Can’t read the plans? Upload them and tap Explain: each drawing is put into plain words, in English, Afrikaans, isiXhosa or isiZulu.

Start your build →

General information, not financial advice. Every bank runs its building loans a little differently — the stages, the forms and the rules on your loan agreement are the ones that count. Sources: BetterBond, Absa, Private Property.

Know what you’re signing for.

The Home Owner plan is R899 once-off for one build — every payment against the stage it pays for, from the first draw to the occupation certificate.

Start your build