BOND REPAYMENT RELIEF
Goosen says when selecting the type of interest rate for their bonds , clients can choose between variable and fixed interest rates . A variable interest rate changes with the South African Reserve Bank ' s repo rate , while a fixed interest rate remains the same for a specified period . The best option depends on the client ' s personal situation and risk profile .
“ Moreover , most bond agreements include built-in credit insurance , which can help cover bond repayments during difficult times such as job loss , illness , or divorce . Potential homeowners should ensure they have access to credit insurance when taking out a mortgage .
“ Given the economic turbulence in South Africa , many individuals face difficulties in paying their bond instalments on time or in full . In such situations , Antonie Goosen advises homeowners not to ignore the problem but to contact their banks promptly and explain their situation . Financial institutions can offer various options to ease the financial burden and avoid defaulting on bond repayments and home repossession ,” says Goosen .
Six Options available to assist Distressed Bondholders : 1 . Payment Holiday is a temporary suspension of bond repayments to overcome a loss of income or unexpected expenses .
2 . Debt Restructuring involves modifying the loan terms , such as extending the repayment period or lowering instalment amounts , to make it more affordable .
3 . Reduced interest Rate may be offered to clients with a good credit history and who meet specific criteria .
4 . Debt Review is a legal process that helps over-indebted consumers restructure their
SA Real Estate Investor Magazine AUG / SEPT 2023 52