select
|

I can't afford my bond repayment - what now?

Despite our best efforts, we all hit bumps in the road at times and financial ups and downs can’t always be predicted. So what happens when, as a homeowner, you find yourself under unexpected financial strain and your monthly bond repayments suddenly become more than you can handle?



“This kind of situation happens all the time,” says Tony Clarke, Managing Director of the Rawson Property Group. “As hard as banks try to ensure that bond holders will be able to meet their repayments, people get retrenched, they have unexpected medical expenses, the interest rates rise – there are all kinds of things that can affect financial circumstances that nobody canpredict. Luckily,” he continues, “because it’s so common, there are procedures in place specifically designed to help bond holders out when they do find themselves in financial trouble.”

As in any recovery process, the first step, according to Clarke, is to admit that you have a problem – and to do it as early on as possible. “Don’t wait until you’ve underpaid or missed your first repayment,” he advises. “Keep an eye on your finances, and as soon as things look like they might get rocky, start making plans to minimise the damage. These things don’t go away on their own, so you can’t just hide your head in the sand and hope for the best.”

In many cases, re-prioritising your budget to minimise non-essential expenses and channel funds to your bond may be enough to tide you over a rough patch. If that’s not the case, the next step is to get in touch with your bank as soon as possible.

“A lot of people might be tempted to hide their distress from their mortgager, but that’s actually the worst possible thing you can do,” says Clarke. “It’s in your bank’s best interests to help you keep your home – nobody wins in a repossession situation – but they can’t help you unless you let them, and the earlier you tell them, the more help they can give.”

The first thing your bank will do is assess your income and expenditure, and advise you on anything you may have overlooked when prioritising your budget. Assuming there’s no wiggle room, however, they’ll move on to other measures.

“The exact process differs from bank to bank, and customer to customer,” says Clarke. “You might be allowed to pay a little less for a few months while you get back on your feet, or you may be offered a brief “payment holiday” to give you time to get your cash flow back to normal. In situations where your finances are likely to be compromised over a longer term, your bank might restructure your loan over an extended period to reduce your monthly repayments, permanently. There are lots of options available when you talk to the right people.”

The moral of the story, according to Clarke, is that no matter how dire your financial situation may seem, your bank is there with a plan to help – if only you’ll let them. “Banks have entire divisions specifically trained to help rehabilitate distressed creditors,” he says. “You won’t find anyone more qualified, or more motivated, to see you back on solid financial ground.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK