Xolile Bhengu
Xolile Bhengu
Banks are repossessing 50percent more residential properties now than they were a year ago.
Although they are not willing to reveal exact numbers, they say the full extent of the repossessions will be quantified by the end of the year and early next year.
Here are some tips to avoid losing your home.
l Take a look at your overall expenses. If you are just making ends meet, then it's time to approach your bank and look at various options to get out of debt.
l If possible, homeowners should always put down a deposit when buying property, making sure you have sufficient equity in the property right from the start of the mortgage loan.
l Don't wait until you are in arrears before you speak to your bank. The quicker you approach the bank, the better the chances are that they can help you.
l Consider extending your bond term from 20 years to 30 years as this will bring down the cost of monthly repayments.
l Fix your interest rates. If you did not fix the interest on your home loan and the Reserve Bank increased the repo rate in August, could you still afford your bond? You can switch back when your budget allows for it.
l Still in a bind? Approach your bank and ask if you qualify for interest-only payments for your home loan.
l Consider consolidating other debt into your mortgage loan and depositing extra funds such as bonuses into the mortgage account, which will reduce the outstanding loan amount and thus interest payable.
l Keep a clean credit record. Banks have become stricter in lending. Your behaviour now determines your future ability to access finance.
l It's time to be realistic. What are the luxuries and necessities in your budget? If you can live without it, pay it off and spend less or close the account.