Covid has stolen so much of all of us, but one of the most heart breaking losses is when a family home is lost due to non-payment of the loan at the bank. With the unemployment figure as high as it is, this is more frequent than we would like to think.
It is important to remember that when a homeowner has a bond (loan) from a financial institution, there is an agreement between the bank and the borrower that the amount borrowed will be paid back on certain terms, example: within 20 years at 8% interest with an instalment of R 5 000 per month. When a borrower then defaults on payment the bank will have to recover the funds owed to them.
Clients frequently sits in our offices at such a late stage during the process that there is not much that can be done.
There is a prescribed process that the bank has to follow and when you arrive in this situation this is what you can expect:
It is important to note that at the auction the property may be sold for far less than what you owe the bank and you will still remain responsible for the balance to the bank.
The question asked by clients is usually whether their homes can be saved from the auction, and as stated above there are several options available, but the options become less as the time goes by and the auction date comes closer. One example is to sell your house privately, where you know you will get a market related price which should be more than the amount at the auction. Your credit record will then also remain clear and when this financial difficulty passes you will be able to start again,
When you fall into financial difficulty, speak to your bank, your family and your lawyer. There are ways to reach the other side of this dilemma without as much heartache and still keep your credit rating in good shape.
Get in touch with us to discuss how we can help you with your challenges