Tips to keep up with your bond repayments in difficult times

Your home loan is arguably your most important debt and asset. Staying on top of home loans repayments should be a priority, as normally one of your biggest monthly contributions; it is difficult to get back on top if you fall behind.

“Everyone is stretched financially at some stage. With holiday debt still around, school fees just paid and interest rates up you may find yourself with no breathing room and your biggest and most important debt, your home loan, is suddenly a big commitment,” says Patricia Temba, head of collections at FNB Housing Finance.

The very heart of the issue is that your income needs to exceed expenses. The only way in which to make this work is to increase your income or lower your expenses.

Be overly strict for a few months – make the money you earn work for you by implementing strict measures to get back on top of your payments.

“Print out a bank statement and look at each expense leaving your bank account,” says Temba. “More than likely unnecessary expenses are coming off, whether it is pay TV, entertainment or even unnecessary banking fees, each rand saved will help. There is not much point in having Pay TV or ordering pizza in if you don’t have a home in which to enjoy these luxuries.”

It’s important to note that strict economies aren’t forever – just until you are back in a comfortable space. So, look at places to cut down – there are some necessary expenses that you can’t forgo. However, there are usually places to negotiate and cut down.

“Insurance is one place that is open to negotiation, spend some time gathering quotes and renegotiating your insurance contracts,” says Temba.

Another place to cut back on expenses is services such as cell phone bills. Having a cellphone is considered a necessary expense, but racking up huge data costs to surf the internet or chatting for hours to friends is not necessary,” says Temba.

You can also look at water and electricity consumption. Just by being more vigilant you can save on these expenses.

You can also pause or temporarily reduce contributions to retirement annuities and other savings accounts.

“This is not a long term solution to solve your cash flow problems and certainly you shouldn’t be tempted to cash out as there are tax implications. But reducing your savings commitments for a few months may give you breathing space until you are back in a position to service your debts and continue investing and saving,” says Temba.

And make sure that as soon as you are in a position to, you reinstate all your investments and savings contributions.

If you are really not getting on top of your expenses and you are consistently exceeding your income, you will need to look at other ways in which to increase your earnings.

“Again this is not a long term solution, but can help relieve the immediate pressure until you are able to make your responsibilities again. Consider working overtime to earn a bit more or another possibility is to cash in leave days, if you have the option,” says Temba.

Other ways to earn a bit more cash could be to rent out an extra room for a few months.

“Don’t be tempted to miss or stop paying your bond all together,” says Temba. “Even partial payments show good faith and interest will accumulate more slowly,  helping you to catch up.”

However, partial payment isn’t a long term solution. If you are really struggling speak to your bank. Admitting you need help as soon as you realise that you are heading into financial difficulty will go a long way to protecting your home.

“Your bank will make provisions for you to ensure that you keep your home. Repossession is the last resort and banks will assist you in every possible way to ensure that this doesn’t happen,” says Temba.

“There are a number of solutions the bank can offer to help you if you are having financial difficulties, however it is up to you to also proactively take steps to help yourself out of the position you have found yourself in,” says Temba.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us