Becoming a property owner is everyone's dream. Regardless of where you live or whether you're single or part of a large family, owning a home is a dream shared by most. Although many people are able to buy a property, not every property owner is lucky enough to be able to keep their property.
Financial difficulties often make it impossible to continue to make the bond payments, which often make the bank begin the repossession process. This can be a very stressful and frightening experience for the homeowner and their family. Sometimes they have trouble making their bond payments because of redundancy, health problems, death in the family, divorce or similar problems. Sometimes they are forced to sell, and selling property when under pressure can be difficult.
Too many homeowners suddenly give up and think they have no choice but to lose their home just because they are having financial difficulties. What they don't realize is that they have options to help them avoid repossession.
Contact your banker as soon as you start struggling to make the bond/mortgage payments. This option is listed first because it's probably the most important. The bank is probably willing to help you keep your property because they often lose money when they have to repossess a property. However, they can't help you unless they actually know you need help. This is important if you plan to stop repossession of your home.
Ask your banker about a "holiday" or "grace" period. This can be from 3 to 6 months and it is a period where you don't have to make any payments. Often this amount of time gives the homeowner enough time to evaluate and improve their financial situation. This may include finding a new job, paying off other debts or awaiting payment that may be owed to you by someone. Banks are usually willing to help with this if you're honest with them and don't wait too long to get hold of them.
Ask that the term of your bond be increased. Many bonds are set up for a term of 20 years. By having the bank extend the term to 30 years, your payments are going to be smaller and possibly easier to make. It's important to remember that you will be paying more interest on your bond but your monthly payments will be smaller. If your financial situation improves in the future, you can always revert the loan back to 20 years again. You can rely on this to prevent repossession of your property.
Your bank may be willing to negotiate on the overall debt total. This can help you in many ways including less interest, smaller monthly payments and shorter term on your bond. The bank may not get as much as they'd hoped for but they're going to get what they need so they are still making money and you're keeping your property. The bank would much rather help you this way than have to go through the expense of repossessing your house.
Contact a property investor or repossession expert for help. Although this may be a last resort, it can also turn into one of the best options. They will often step in and buy the property from the bank before it can be repossessed and sold at auction. Another reason this option works for many homeowners is because they are often allowed to rent and continue to live in the home.
As you can see, as daunting and stressful as the situation may appear, there are options you can take to avoid repossession. The important thing is to check on these options as soon as you begin having difficulty making your bond/mortgage payments.
