Topping up bond repayments could help during rainy days

Young couple having fun deciding on paint colour swatch for new home
Young couple having fun deciding on paint colour swatch for new home

December is a few weeks away and many companies have started rewarding their valuable employees with bonuses, profit-sharing incentives and 13th cheques.

However, 2017 has been a year like no other in the recent past.

The unemployment rate is creeping closer to 30% and there appears to be no inspiring plan from big corporates and government to decrease the depressing and ballooning number of those without jobs.

From a distance, the only plan that these two institutions seem to have is to cut jobs while generating as much revenue as possible from those who are earning an income.

It is during times like these when many members of the public try to find a way of ensuring that their immovable and movable assets like houses and cars are paid up as quickly as possible.

If you bought a house for R800000 chances are that you are currently paying about R8000 a month on a 20-year bond.

If it happens that in the near future you get a substantial additional income, adding an affordable R250-R500 to your monthly bond repayment could reduce your repayment period drastically and you would find yourself settling the debt quicker.

A decision to add more money to your bond would require major sacrifices, especially considering that household expenditure is forever shooting up.

Another advantage of topping up your bond repayment is that the money could provide you with a soft landing should you lose your job abruptly and unexpectedly - as chances are high that you will fail to keep up with repayments.

Thozama Mochadibane, the head of customer experience and complaints resolution at Nedbank, said when customers face financial difficulties, it was advisable for them not to ignore the problem or to shy away from their financial institutions.

"Don't ignore the problem. but reach out to them [financial institutions] and advise them of your situation as they will give you various solutions to help you.

"It is in the bank's interest to do everything possible to help preserve home loan accounts in their books and keep home owners in their homes," Mochadibane said.

Mochadibane also advised customers to know their mortgage rights and obligations.

"Find your home loan agreement document and go through it to understand your rights as a home owner.

"It is important for home owners to understand their rights and the process their bank will take when they can't make their bond repayments.

"Your loan agreement document has some valuable information to help you understand the contract."