“As with anything in life there are high times and low times for all involved. Currently due to do increasing inflation rates and high interest rates, home owners are starting to feel the effect of the recent rate hikes and many out there are battling to make their bond repayments.
Many home owners are unfortunately being forced to sell their home as they are battling to make ends meet. Selling one’s property might seem like a simple solution when you are under financial pressure, but not in this market. Selling a property in market such as the current one is an absolute nightmare as no-one out there is currently buying due to high interest and banks requiring hefty deposits which first time buyers are simply unable to afford. To add to this, the media is continually spreading the word that now is the time to rather rent until interest rates start dropping again. This puts struggling home owners in a tricky situation as they are literally stuck with a property that they cannot afford, and are unable to flog the property no matter how hard they try.
Unfortunately at the end of day situations such as these often lead to repossession. Banks only have one route to go down in order to cut their losses and this normally means stepping in and reclaiming the property. The rate of repossessions in the current South African market has almost doubled since 2006 when interest rates were still fairly low. The current times are a clear sign of an affordability crisis caused by recent interest rate hikes and rising inflation. To add to the fact that home owners are struggling to pay their mortgage, consumers in general are under a lot more financial pressure either way due high petrol and food prices looming.
If we look at one of the possible reasons why we are facing a market such as the current one, we need to go back 3 to 4 years and examine the populations behavior. These were the times when first time buyers were hopping onto the property ladder left right and centre. Interests rates were low, petrol and food was cheap, people were spending. Banks were lending extremely leniently as people had money to burn. The problem came in where these first time buyers failed to acknowledge and prepare for the future interest rate hikes that we are experiencing currently, and as a result are now feeling the pressure. The good times are over and the struggle has begun. When interest rates were low consumers were living the high life, taking out credit cards, going on expensive holidays, buying fancy cars, and basically increasing the quality of their life style like never before.
If only the media educated us just a little bit more and at least informed consumers and first time buyers that interest rates will be going up eventually, and that these good times are not going to last forever. Instead, the media spread the word to buy buy buy and spend spend spend. This is one of the core reasons we are now seeing more home owners facing repossession than ever before.
Luckily it is not all bad, there are solutions out there to help home owners out of their problematic situation. Repossession services exist out there who are normally made up of numerous property investors and are able to buy houses for cash. These investors are able to provide the home owners with a quick sale and are often able to buy the property for cash. These investors will normally offer a discounted price on the home owners property in return for a quick, hassle free and guaranteed sale. A win win situation is created for all, the investor gets to acquire the property slightly below market value and is pleased with his purchase, and the seller is finally freed from their financial trouble once and for all. As a result the investor has also managed to save the home owners credit record which is a major benefit for the home owner. If the home owner were to be obtain a bad credit record they would normally be banned from the lending industry for at least 5 years. Even something as simple as renting a property for the home owner would be difficult as most landlords do intensive credit checks on all prospective tenants.
In addition to saving the home owners credit record, another major benefit of going with a repossession company is that they will normally allow the home owner to remain in their home after the sale in which case they would be renting it back from the repossession company. This can be very useful for the home owner as in most case the home owner wishes to remain in the home as they are normally close to schools for their children, may have family nearby etc.
As we have seen there are solutions out there to prevent repossession in a market such as the one we are currently facing. It is however important to note that should the home owner wish to go this route, it is absolutely vital that they contact a repossession company that buys houses for cash sooner rather than later. Easy Home Sales is a specialist in this area so give them a call today in order to seek help.”