Always keep up with bond repayments - even when times get tough

Your home is your most important asset and in tough financial times priority should be given to paying your mortgage bond instalments, says Anne Porter, head of Knight Frank Residential.
If allowed to fall behind, it becomes very difficult to catch up later, Porter warns.
“With the last two increases in interest rates, and costs of food, fuel and electricity rising, many households will be feeling the pinch and it’s time to assess what can be done to help you through any financially difficult months,” she said.
Families must be strict with regards to the amounts spent each month. Many households might have unnecessary “extras” that they don’t think about, such as gym memberships that might not be utilised in their entirety, or magazine and online subscriptions that run month to month without ever being re-assessed as to whether they’re absolutely necessary. Other payment items to consider are grocery spends and cell phone accounts. Check where grocery shopping is done and the quantities bought, as many households tend to buy expensive items or too much and throw a lot away, and if a cell phone contract can be capped or converted to “pay as you go” use that service instead.
“It has to be remembered that every little bit will count towards a saving each month and that cutting back does not have to be forever. It will just be for a time, until you manage to get ahead of the bond repayments once more,” said Porter.
“If there is a chance that there will be a shortfall on the monthly instalment on the mortgage, it is best to contact your bank and discuss your predicament with them.”
Banks are willing to discuss methods to assist home owners in difficulties. One of the solutions is to extend the term of the bond from 20 years to 25 or 30 years. That way the monthly payment can be reduced. Banks want to help you keep your home and only resort to repossession as a last resort.
“There are always solutions and ways to get through a difficult financial time, and the best way to get through it is to be proactive and work on sorting out the problems by communicating this and your intentions to solve the matter to your bondholder,” said Porter.

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