Home repossession is probably the most stressful and daunting experience a homeowner can experience. There is no blow quite as devastating as knowing you’re going to lose your home. Everything you’ve saved for and dreamed about will be gone. As horrible as this sounds, hundreds of people in South Africa, as well as other parts of the world, go through this every year. Their most valuable asset is gone.
Economy has been very hard on everyone with soaring interest ratings and inflation that just won’t seem to quit. Homeowners that may have started their home bond paying a low interest rate are now paying a high rate, making it very difficult to keep up with the monthly payments. Some homeowners have had to refinance and have two mortgages on their home. With the values of their home decreasing, refinancing is not an option to help them keep up because the equity is just not high enough.
Unforeseen circumstances often cause financial difficulties to homeowners as well. A well-paying job they may have had when they bought their home may no longer exist. Death in the family, divorce, separation or the high cost of living may all contribute to homeowners being unable to make their monthly bond payment. The result in many cases is a home repossession. They knew this was a risk when they signed the bond agreement with the bank but never thought they’d be in such a daunting situation.
If any of these circumstances sound familiar to you, don’t give up and feel repossession is your only choice, there are ways to stop repossession of any owner’s home. There are several other options. Contacting your bank is always the first step that should be taken. Don’t wait for them to contact you and ABOVE ALL don’t avoid talking to them. If you’re honest with them about your situation and believe there is a way that you can catch up, they’ll want to work with you. No one wins in a home repossession and banks will only repossess on a home if there is no other choice for them to get their money back.
Many people tend to give up and feel that repossession is their only answer. They even mistakenly believe that the bank will sell their home and give them any leftover money after the bond is paid and they can start over. This isn’t how repossession works here. The bank will bid on your home at a Sheriff’s auction and will only bid as high as the amount you owe them. So, you will lose your home and any equity you may have in the home. There are however methods to prevent repossession of your home.
Your credit history will also be severely damaged with a record of repossession. You’ll be black-listed and won’t be able to get credit for up to 10 years. If you thought things looked bad before you lost your home, you’ll find out they are a lot worse after repossession. Repossessions often go so quickly so you won’t really have time to try to sell your home and get a decent price for it.
If you aren’t able to work out a compromise with the bank, your best option may be to contact a repossession company to help you. They’ll quickly buy your home from the bank so you won’t have repossession on your history. You may also be given the option of renting the home from them or buying it back when your financial situation is better. Although many consider repossession companies as a last resort, it’s often the perfect choice to stop a home repossession.
Dale Purdon, director and founder of IMAGINE Properties, Easy Home Sales any many more. Prior to setting up IMAGINE, Dale set out to build his own property portfolio in South Africa where he focused on acquiring high yielding rental properties in the lower end market and gained extensive experience in stock-sourcing as well as portfolio management.