Cape Town – The 2020 Covid-19 lockdown still has many homeowners under financial pressure.
Pay cuts and even unemployment are always realities for families, and mortgage repayments are proving difficult.
Some homeowners even face the grim reality of losing their home and considering their options, including turning to their bank for help or selling their property.
And if so, it’s not the end of the world, despite how it feels.
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For homeowners in this predicament, banks and real estate experts are offering the following tips to help them keep their homes or at least keep their title to landlord by moving to a more affordable property.
Banks want to keep people in their homes and therefore encourage homeowners to contact them when they see they are approaching financial hardship. Absa has proactive measures in place to identify and assist customers who are showing signs of financial distress, whether or not the customer has missed a payment, says Geoff Lee, general manager of home loans, personal and business banking. .
“We offer a variety of support plans for customers in distress, our ultimate goal being for customers to overcome the distressing situation and keep their homes. “
Echoing this, Buyisile Maseko, head of growth at FNB Home Finance, says homeowners should contact their banks or mortgage providers as soon as they realize they are unable to complete the loan. payment of their obligations. “Don’t wait for the bank collection and collection team or department to contact you,” she says.
2. Consider making a new deal
If homeowners find that they are unable to pay off their entire mortgage, Lee says the bank offers a variety of support options for customers who are experiencing short-term financial difficulties. These may include a limited period of lower repayment installments.
“If the distress is long term in nature, we have a dedicated team to help clients sell their property and move into a more affordable home. “
ETFs too, says Maseko, have several options available, especially if homeowners are facing the debt problem before it gets worse. Some initiatives to help troubled mortgage customers include restructuring payments, accepting interest payments only for a certain period of time, or reducing payments over a specific period.
3. Consider selling before it’s too late
If none of the bank’s options work, homeowners with up-to-date accounts could sell their properties privately or with the help of a real estate agent. Banks also have assisted selling programs.
Owners who sell due to financial difficulties should “not wait too late,” says Jill Lloyd of Lew Geffen Sotheby’s International Realty. If their property is sold by the bank at auction, they might not get a good price and will still be responsible for the shortfall.
“It is important not to come to this. Talk to an experienced agent and they will market your home and, if necessary, stay in contact with the bank to prevent them from putting pressure on you… Agents are not going to announce that you are under pressure. They will try to get the best possible price for you.
4. Refinance and Consolidate Debt
If they have owned their properties for a while, the owners could have a lot of equity. It could be as simple as calling a mortgage broker and seeing if they can consolidate your debt, Maseko says.
5. Consider downsizing
Maseko also advises owners of several properties to consider selling one to settle their arrears. If they don’t have that option, they might consider selling their home, renting it out for a while, and then re-entering the real estate market by purchasing a smaller home.