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Repossession of your House - An Unfortunate Event In Ones life Money problems can happen to anyone and everyone. Even a person who is very careful with cash can fall into bad times. If one is placed within such a situation the bond repayment, which was once within your limits when you purchased the house could turn out to be commitment beyond your reach. In fact this could be due to an enhancement in the interest rates, and the price of fuel, food and other essential items. Irrespective of the reason why you have stopped paying your mortgage - redundancy, death of the breadwinner, divorce, failed business venture, inability to refinance and many more - the bank will take action as soon as mortgage payments are not kept up to date, and will repossess your house if they feel you are unable to meet your monthly repayments presently or in the future. This spells a disaster for most of us as house is an asset which all of us cherish and we would do our last bid to save it. What to do in such a scenario? The good news is that we can prevent the repossession of your house, if you are willing to work with us. What a wonderful relief it would be if you could go to bed again at night and fall asleep without this sword hanging over your head. Read on to know more… There are, however, a few things that you must understand beforehand: The biggest mistake that property owners make who cannot meet their bond payments is not to contact the bank in good time, but wait until the bank contacts them first. Many property owners then ignore the banks calls and letters. Now alarm bells will ring at the bank immediately! If you see that you will not be able to make any month’s payment, you must contact the bank, explain your situation, and make an appointment to see them. It is in the bank’s interest to find a solution to the problem. There are various possible solutions - each person’s situation is unique • You could extent your mortgage payback period to 30 years, or apply for an interest only mortgage (SA Homeloans, for instance offers interest only mortgages). This will give you more cash in hand, but you will be paying more interest. You could change the mortgage repayment again after reorganising your finances. • Your accountant or financial advisor could give you financial advice (NOT an insurance broker!). They have seen situations like this before and might give you feasible ideas that can be implemented. • The bank may give you a payment ‘holiday’ until your situation has improved - like 6 months of paying only half the monthly amount, or 3 months of making no payments, depending on your personal situation. The consequences of not keeping up with your mortgage payments: • When the house has been repossessed, the Sheriff will auction it. The bank will also be bidding at this auction. If the property is worth R1 000 000, for instance, and the outstanding bond is R500 000, the bank will bid at the auction up to R500 000, and then leave the auction. If the bid is granted at R500 000, the bank will get their outstanding money back. If you think you will get some money back after the auction, you may be in for a very nasty surprise. Many auctions do not go much higher than the reserve price that the bank has asked for. Now the owner has no house PLUS a bad credit record. He may not be able to get credit for a long time (talking in years!), and struggle to rebuild his life. • The bank will repossess your property if you do not keep up with your monthly payments, and do not communicate with them to find a solution. If a solution cannot be found, the bank will take steps to have the property repossessed. Some people give up and wait for the bank to do the repossession. They think that all their financial worries will be over after the bank has repossessed the house - but as soon as your house has been repossessed, all your creditors will be knocking on your door. Someone who has gone through repossession might be financially ruined for a very long time, because he will not be able to get credit. How we can help you The best action to take to prevent repossession is to sell the property to a reputable property investor and settle all outstanding debts as soon as possible. The property owner might have some late payments listed on his credit file - but not a repossession that might take years to repair or clear. He can rebuild his life again by starting afresh, and may soon be able to buy a property again. We are property investors who will value your property and give you an offer to purchase within days. We will even settle your outstanding payments with the bank before the transfer has taken place. So you will not have to worry about a creditor every time the phone rings; or that the Sheriff will come knocking on your door. Our criteria We are not able to help everyone. We have certain criteria according to which we can help you: • We must be your last resort, and you must be willing to work with us. First of all we must value your property to see if you have enough equity. You will have to pay R1 000 for the valuation. Equity is the difference between the market value of your property and your outstanding bond. Should you meet the criteria, We shall buy your property for up to 70% of its market value. • If you don’t want to sell your property, we can provide you with a loan of 40% of the equity in your property for a period of 4 months. This loan will act as a bridge loan. A bridge loan is interim financing for an individual or business to carry him until a permanent solution has been found, or the next stage of financing can be obtained. You must have an exit strategy at the end of 4 months. This could entail having been given enough time to re-mortgage your property to release funds; or you might be waiting for funds to clear from somewhere else. We will lend you this money at 5.14% per month. This is not cheap, so we must be your last option to prevent repossession. We can also help with fast sales in cases where people are relocating abroad, or have been divorced or separated. Contact us by email at colin@prevent-repossession.co.za, or send a “please call me” to 0728386854
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Colin Brazendale is author of this article on repossession of property. Find more information about property repossessed here.
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