When you take out a home loan, you don’t intend to falter on your monthly repayments. However, the unthinkable may happen and you’ll have to find a way forward.
We have a look at what you can do to prevent your home from being repossessed, and how to halt this process once it’s started.
Communication should be your go-to
According to Simon Stockley, co-founder and former chief executive of SA Home Loans, should it become impossible to maintain your home loan repayments, communication is key.
“The bank or mortgage provider doesn’t want to take back your home, and they only do this as a last resort,” says Stockley.
“If you anticipate a liquidity crunch, convey this to your lender and try to negotiate a payment holiday, or a reduced instalment, for a period of time,” he explains.
Stockley points out that your chances of success are much better if you talk to your lender before you’re in arrears – or immediately thereafter.
“Even if you can’t make the full instalment, it’s important to pay something. Your lender is going to be far more approachable if they can see some attempt is being made to service the debt,” says Stockley.
What if repossession is already in progress?
If you’ve waited too long and repossession has commenced, there are steps you can take to revert this process.
Stockley notes that it’s even more paramount to communicate with your creditor during this time. He explains that if you fall silent and fail to engage with your lender, they are more likely to pursue a legal outcome, which will ultimately lead to foreclosure and the selling of your home.
“If you talk to them and make an attempt to repay what you owe – or at least a portion of the monthly instalment – they will do everything possible to stave off legal proceedings,” says Stockley.
“Remember, if you negotiate an extension, payment holiday, or reduced installment, it’s vital that you get the terms recorded in writing,” he says. Having the agreement committed to paper will help you avoid further disputes later on.
For more visit: www.justmoney.co.za