What to do when you can’t afford to cover your bond repayments?
It’s every homeowner’s worst nightmare – realising that no matter how much you scrape and save, you just don’t have enough money to cover your bond repayments. With the cost of living escalating every day, it’s a situation that has become all too common in South Africa. Thankfully, experts say it doesn’t have to be the beginning of the end for your home.
Leonard Kondowe, National Admin Hub Manager for Rawson Property Finance, shares his advice on what to do if you find yourself in this scary situation.
Step 1: Get in touch with your home loan financer/bank
“It can be very tempting for bondholders to just ignore the problem and hope their bank doesn’t notice a missed payment or two,” says Kondowe. “This is really the worst thing you can do, delaying the inevitable and putting your lender in a far less sympathetic position when they eventually contact you. It’s far wiser to approach your bank as soon as you realise you’re in financial difficulty, and leverage their experience to find a workable solution to tide you over what is hopefully a temporary financial crisis.”
Some banks are able to handle enquiries about mortgage repayments via their call centre, but most will require you to visit your local branch and sit down with an expert. It’s often easiest to start with a phone call and let the call centre direct you to the appropriate person or place.
Step 2: Be open and honest about your situation
Once you’ve found the right person to talk to, Kondowe says it’s essential to be as open as possible and bring proof of the issues that are causing your current financial crisis. That includes documentation of your current income and any job losses, unexpected expenses or overwhelming debt.
“The most important thing is to be honest – don’t try to manufacture a fake story for sympathy,” says Kondowe. “Your lender is going to require proof of any claims you make, and any lies or embellishments are only going to work against you.”
The level of stress associated with selling a home is similar to that of a divorce or really bad breakup – and worse than the anxiety associated with planning a wedding, getting fired or becoming a parent.
That’s the word from Berry Everitt, CEO of the Chas Everitt International property group, who says the latest research by giant US property portal Zillow reveals that more than 75% of home sellers find the process stressful and that it has reduced more than 36% of those who have gone through it in the past year to tears.
“As for the specific reasons for the anxiety, 70% of sellers surveyed said they had experienced uncertainty over the sales price, 69% had worried about selling within their desired timeframe, 65% were concerned about renovations and repairs that needed to be completed before their home was listed and 65% feared that the offer they had received would fall through.”
In addition, he notes, more than a third of survey respondents said the sale process had taken much longer than they thought – which is also a common complaint in SA, especially among first-time sellers who aren’t aware of all the steps it takes to get from listing their home for sale to the registration of transfer into the new owner’s name.