Real Estate Investor Magazine South Africa April 2014 | Page 36

FINANCE
While the economy has started to show signs of
recovery, the full recovery is going to take a few
years still, and with the high cost of living, many
homeowners will unfortunately find themselves having
to make difficult choices when unable to afford to pay
the bond repayments.
However, there are solutions for homeowners in
distress. When you can no longer afford your home,
don’t lose hope and let the process run its course,
because that is the worst thing you can do. The best
thing to do is be proactive because while having to lose
your home is by no means ideal, there are things to be
done to make the situation more palatable, you don’t
want to end up blacklisted and have negative credit
information.
And most importantly, never take on more debt to

cover your bond.

Ideally, approach your bank and talk about the
facts. If the bank is aware of your situation it is a
possibility that there are a couple of solutions to either
help you out or lighten the load. Banks will be far more
willing to assist someone who is upfront and needing
assistance, than someone who defaults on payments
without any prior communication.

There are solutions that could help make the
difference between losing your property forever, or
keeping it. Banks can sometimes offer a holiday period
where you don’t pay your bond for a few months as you
get back up on your feet. Alternatively, negotiating
a longer term bond will result in decreased bond
repayments, either way these are short term solutions
but at least it is better than nothing.
Also, consider seeking counsel from a debt
counsellor. The counsellor will be able to review
the current state and submit an alternative to all the
creditors, but remember this is still a short term
solution. A more permanent problem will result in the
counsellor placing you under administration, where
unfortunately, the home can be repossessed to mitigate
the bank’s losses.
If all options have been exhausted, if there is no way
of keeping the property, you have the option of trying
to sell the property to ease debt, while keeping your

credit rating intact.

A last resort is that banks are now assisting
homeowners before the repossession phase to sell
distressed properties at market-related prices.

RESOURCES

RE/MAX, Rawson Property Group

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April 2014 SA Real Estate Investor

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