1.)   I can’t afford to pay my bond anymore – what should I do?

The thought of the bank foreclosing on you and losing your house can be a very emotionally traumatic issue. So traumatic, in fact, that many homeowners feel that they are doomed no matter what they do and so they just give up and do nothing; purposefully defaulting on their mortgage. However, this is the absolute worst thing that they could do as there are always proactive things that can be done to better the situation.

Leaving the situation to run its course is tantamount to financial suicide as it will not only result in losing your home, but it will also lead to a bad credit record and being black listed.  Consumers with bad credit records, or who are black-listed, are normally banned from the lending industry for five to 10 years which means that not only will they be declined for any type of credit application, but they will even find it difficult to rent a home as the majority of landlords run credit checks on their prospective clients.

The best thing to do in these circumstances is to take immediate action – accept responsibility, take control of the situation, consult broadly and act decisively.

2.)   Should I communicate my financial situation with my bank?

Yes – it is highly advisable to contact your bank and let them know your situation as they may be able to help you and will be more sympathetic with you when dealing with the problem.

Most banks have recognised the dire economic times we are living in and the majority of them are bending over backwards to reschedule debt and help homeowners keep their homes. For example, you might be able to negotiate what is called a “holiday period” which is normally a three to six month period where you don’t have to pay any instalments. This will offer you a short-term solution to your problem with the hope that you will be back on your feet once the holiday period is over.

Alternatively, you could perhaps negotiate a longer bond term – in other words, instead of paying your bond off in 20 years you can pay it off in 30 years, which should decrease your monthly repayments.

If you are not sure about how to approach your bank, or you would like to explore further options, you should contact a professional debt counsellor who should be able to help you “get your ducks in a row” so to speak.

3.)   What are the benefits of going under debt review and going under administration?

       Debt Review

A professional debt counsellor will review your situation with you, submit a proposed payment plan to all your creditors and apply to court to have this proposal granted. Once you have applied for this process, all creditors must cease legal proceedings against you and participate in the process and the bank cannot repossess your house.

       Administration

A process that is very similar to that of debt review, but it is viewed as a more permanent measure. Unlike debt review, which assumes that your debt is a temporary crisis, administration assumes that the situation will not be remedied in the short-term and hence longer-term settlements will be negotiated with your creditors.

Here, your property will be repossessed to help settle your debt.

4.)   Can I sell my property to cover my debt?

There are many cases where the debt burden is just too big for borrowers to manage and in these cases the best chance of recovery and keeping their credit rating intact is to sell their property and use the proceeds to cover their debt. That is to say, as long there is enough equity in your property to cover the outstanding bond amount. Such a sale would release you from any debt obligations and allow you to re-establish your credit faster and enter the market again much wiser.

If a homeowner continually fails to pay the home loan instalments to the point where the home loan is cancelled by the financial institution, the home will be repossessed. However, in an effort to assist homeowners who are no longer able to afford their bond repayments, the banks are now selling these distressed properties through reputable estate agents for a market-related price. RE/MAX of Southern Africa, for example, is currently working with First National Bank, Standard Bank and Nedbank to sell their distressed properties. There is a dedicated RE/MAX assisted sales department that manages approximately 200 distressed sale leads per month with an 80 percent success rate. These properties are sold, on average, within 30 to 45 days and, on average, also achieve more than 85 percent of the asking price, which could mean a quick solution for many homeowners to a stressful and complex problem.

5.)   When, if ever, should I consider sequestration?

When you are sequestrated, all debt is written off. If there is really no light at the end of the tunnel and there is no way you can possibly find your way past the debt, then you can consider sequestration. However, it should be seen as a last resort as it will leave you with seriously negative financial ramifications with regards to being blacklisted and not being able to start a new business for up to 10 years.

6.)   What are the dos and don’ts of handling such a crisis?

• Speak to your experienced property consultant or bank as soon as you can – don’t wait until you’ve built up a really big outstanding amount.
• Proactively discussing the situation with your experienced property consultant and working with them to find a resolution is always better than giving up and doing nothing at all.
• If you find you can’t make your payments, visit a debt counsellor and seek advice on how to tackle the problem.
• Don’t make false promises to catch up and never ignore the situation as it will lead to legal action.  Once a judgement is made against your name the bank is entitled to sell or auction your home without your permission.
• Do not take on more debt in order to finance your home loan.

7.)  Debt Consolidation Home Loan

A home loan is secured against your property and carries one of the lowest
interest rates. The aim of debt consolidation is to increase the amount of the
existing home loan and use this amount to settle your debts. This should
improve your monthly cash flow due to the lower interest rates and finance
charges offered on home loans.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

MORTGAGE BONDS from Mortgage Plus     (011)327-4489

There are so many types of mortgage bonds which are currently available that it can be an often confusing and intimidating task when wanting to take out a mortgage bond which will be most ideal for you. This is where Mortgage Plus can help. With their in-depth knowledge in the mortgage bonds available and what each option entails, this mortgage bond originator is able to guide the prospective of a mortgage bond to eventually decide upon the best option which will match their needs and requirements.

These numerous types of mortgage bonds which are available from the major banks in South Africa such as ABSA, Nedbank, FNB, and Standard Bank, include a few of the options as listed below:

First time buyers Home Loan: This is a special mortgage bond option in that it is ideal for those who have never owned a property or taken out a home loan. With this mortgage bond, the banks will lend you more than 100% of the property value, enabling you to include the transfer and registration costs into the mortgage bond; and hereby making it easier for you to enter into the property market. No deposit is required with this option.
(for the right purchaser) 

A Variable Home Loan: Given at the negotiated interest rate, this mortgage bond option is the traditional home loan optional. Home Loan rates are always negotiable, and are generally affected by the amount of the loan taken out. The smaller the loan, the less chance you have of getting below the prime lending rate. With this type of home loan, if the interest rates increases by 1 percent, your home loan rate will increase accordingly. If the interest rate drops, so will your home loan rate.

Fixed Home Loan Rate: With this type of home loan, your interest rate is fixed for a period of time; for one or two years on average. When considering this mortgage bond option do keep in mind that the interest will be slightly higher than the current loan rate. The beneficial advantage of this option is that it offers you protection from rising interest rates, so for that period of time you know what your bond repayments are. The only downside is that if the interest rates drop, your home loan rate will stay unchanged, resulting in you having to fork out more money at the end of the day.

Capped Home Loan Rate: With this type of Home Loan, you will never pay more than the capped rate, as your interest rate is capped at a maximum rate of interest for a period of time. And if the interest rates increase, you will never pay more than the capped rate you have negotiated. The outstanding pleasure which comes along with picking this option is that you will reap the benefits in the case that rates decrease.

Please do take note that this type of mortgage bond is not so readily available, and there is certain criteria required before your designated bank will approve your application.

For more information on these mortgage bonds and other options, speak to one of Mortgage Plus Mortgage Bond Originators and they will give you details and advise to set you on your way to taking out a mortgage bond you can ultimately afford and will enjoy in the long run.

Quick Mortgage Bond Application Online

Mortgage Plus has a facility online which allows prospective clients of mortgage bonds to apply quickly. Essentially this innovative service of Mortgage Plus has been well-accepted as it saves time and takes away the frustration which would usually come along with making an application for a mortgage bond.

This is a free service, making another reason for the popularity of applying for a mortgage bond online.

So what are waiting for? Mortgage Plus is willing and able to help you get the best mortgage bond you can at the lowest possible rates.

With Mortgage Plus there are no surprises.

Get in contact with Mortgage Plus today and experience the joy of having a mortgage bond expert on your side.

Mortgage Plus : knows the business of mortgage bonds.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za