Repossession of your Home - one of the most traumatic events in any person’s life.
In the current economic climate it is distinctly possible that even somebody who is very careful with money can fall on hard times.
The bond repayment that was well within your reach when you bought the house has now become a commitment that you cannot manage - because of rising 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.
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 everyday.
The good news is that we can prevent the repossession of your house, if you are willing to work with us.
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 bank’s 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:
The bank or credit provider 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.
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) which will bring your monthly payments down. 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 consequences of not keeping up with your mortgage payments:
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.
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 $1 000 000, for instance, and the outstanding bond is $500 000, the bank will bid at the auction up to a price of $500 000, and then leave the auction. If the bid is granted at $500 000, the bank will get their outstanding money back.
Don’t think you will get any money back after the auction, you might still be owing the bank. 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.
How we can help and assist 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 valuate 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.
Thanks to the NCA (National Credit Act) there is another way to save your house from repossession and that is Debt Counselling.
You can apply for Debt Review at any time. As long as your income is lower than your expenses and you have a regular income every month. While you are in debt review or applying for debt review the bank may not repossess your property or any other asset in your name. This will give you more time to reorganise your finances.
Our Criteria:
We can not help everyone who is facing repossession. There are 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 valuate your property to see if you have enough equity in it. 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.
We can also help with fast sales in cases where people are relocating abroad, or have been divorced or separated.
Applying for debt review is a simple process. You can send me an email to help you apply for debt counselling or you can contact me for more information on debt counselling.
Contact Colin Brazendale at colin@prevent-repossession.co.za for help.
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