Can The Bank Retract A Guarantee?
Updated: Jun 22
So today I want to talk about something that can happen when the bank has promised to issue you money so that you can buy a home. The bank gives you a piece of paper that says they will give you your money to buy your home after two to three months, when all the paperwork gets done, the money will be released.
But for now, they're going to give you a promise that they will pay you... however, there's a bit of fine print there. And that fine print says that any time during the paperwork process of buying the home and if anything changes with your financial situation during that time, they can withdraw their promise to pay you the money.
So at the end of all of it, they can say well, actually, you don't have money from us. So why would they do that? Well, first of all, when a bank issues you money or promises to issue you money, they first do a check to see what your financial situation is. They check, do you have car payments? Do you have a payment for another home? Do you owe money to people?
They look at your financial situation. And based on that, they decide, it looks like you'll be able to pay us back. So we will give you the money in two to three months once the paperwork is done. However, if during that two to three month period, you now get excited because the bank has said they're going to give you a million Rand for your new home and you go and spend more money, you go and buy another car, you go and buy some fancy jewelry.
What can happen is the bank can see that and realize that your financial situation is different. Now you have another car and you have jewelry that you're paying off, we're actually retracting our offer to pay you that money. Two to three months later you're without money from the bank, you can't buy a home and the entire sale falls through.
I've seen that happen. So this is just a heads up. Don't go and spend money and change your financial situation. After the bank has promised to give you funds to buy a home, keep things the same. Don't overspend. Keep your financial situation as it is so that things can go smoothly so that you can get your home.
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