Johannesburg - For many people, a home is the most expensive and most important asset they will own.
Yet, with the spectre of a recession again looming, rising inflation, more expensive petrol and increasing food prices, many families are battling to make ends meet.
Currently, more than half of SA’s credit active consumers are over indebted, and many are battling to make the payments they need to.
According to a recent Debt Rescue study, only about 23 percent of South Africans have money left at the end of the month before their next payday.
As a result, says Steven Barker, head of home loans at Standard Bank, if you find yourself battling to pay your bond, speak to your bank.
“The fact that you can’t pay all that is due is generally a sign of things to come. Ignoring the problem for 30 days just means that next month you owe two full installments, miss a payment for the second month in a row and the situation gets worse and the interest payment costs more,” says Barker.
The consequences of sitting back and waiting for the bank to approach you could be devastating to your family, he warns. “Within 60 to 90 days of payment on a home loan falling into serious arrears the legal process of repossessing a home begins.
If the home is sold at an auction and does not achieve the amount owing on the bond, the homeowner is liable for the shortfall, he explains. Legal action can be instituted by a bank to get back the money and the associated legal cost.
The bank explains it helps people in temporary financial stress with solutions such as a arranging a partial payment of the amount owing, or rescheduling a home loan.
“If the worst scenario occurs and Standard Bank finds that a person simply will not be able to meet their financial obligations, steps are taken to help the homeowner sell the house.
“If there is still money outstanding, the homeowner can then sign an acknowledgement of debt and arrange to pay off the balance. In some cases if the amount owing is considerable, we reduce the amount owing by up to 10 percent,” says Barker.
“Large legal fees are not incurred and, best of all, you will have no judgement against your credit record. This will remain intact enabling you to continue with your life and support your family,” explains Barker.
“If you find yourself in financial distress, contact the bank immediately”
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