How to refrain from defaulting on bond repayments

South Africa's mortgage originator Ooba, formerly MortgageSA, advises on how you can avoid defaulting on your bond repayments.

South Africa's mortgage originator Ooba, formerly MortgageSA, advises on how you can avoid defaulting on your bond repayments.

l Renegotiate your home loan rate. Ooba says homeowners must remember that as prices of their homes rise over time, the ratio of the outstanding amount owing to the house's value drops, making you less of a risk to the lending bank. This will put you in a strong position to negotiate a better rate, which can shave hundreds of rand off your monthly repayments.

l Extend your mortgage term. If your monthly mortgage payments are getting on top of you, consider extending your mortgage term.

By doing this you will see your monthly payments reduce.

The downside is that you will end up paying more interest in the long term.

l Buy a cheaper car. Cars are a depreciating asset whereas a property's value increases over time. It might be worth considering trading in an expensive car for a more modest set of wheels, freeing up money for home loan repayments.

l Trim the luxuries. If you are struggling to pay your mortgage, don't bury your head in the sand hoping it will go away. Look closely at other areas of expenditure you might be able to trim. For example, DSTV costs and eating out regularly can easily cost more than R1000 a month.

l Take in a lodger. Taking in a lodger is not as bad as some people think. If you have a spare room, the extra income could be up to 50percent of your bond payment.

There is some inconvenience, but it is a small price to pay for the extra income.

l Payment holidays. If you are in difficulty it is best to ring your bank and explain the situation before you go into arrears.

They might be able to make some temporary allowances. But, this does not tackle the fundamental problem.

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