A home is the largest, most important asset owned by most families, something people view as a legacy to be passed on to future generations. What happens, however, when due to financial circumstances, your home loan payments become difficult to maintain?
The answer, says Steven Barker, Head of Home Loans at Standard Bank is to immediately seek the advice and support of your bank.
“The fact that you can’t pay all that is due is generally a sign of things to come. Ignoring the problem for 30 days just means that next month you owe two full instalments, miss a payment for the second month in a row and the situation gets worse and the interest payment costs more,” says Mr Barker.
The consequences of sitting back and waiting for the bank to approach you could be devastating to your family, he warns. “Within 60 to 90 days of payment on a home loan falling into serious arrears the legal process of repossessing a home begins.
If the home is sold at an auction and does not achieve the amount owing on the bond, the homeowner is liable for the shortfall. Legal action can be instituted by a bank to get back the money and the associated legal cost.
The actions typically taken by Standard Bank to help people in temporary financial stress could include:
“If the worst scenario occurs and Standard Bank finds that a person simply will not be able to meet their financial obligations, steps are taken to help the homeowner sell the house. The Standard Bank Easy Sell plan ensures that the best price possible is obtained as the bank employs the services of an estate agent to market and sell the house.
“If there is still money outstanding, the homeowner can then sign an acknowledgement of debt and arrange to pay off the balance. In some cases if the amount owing is considerable, we reduce the amount owing by up to 10%,” says Mr Barker.
“Large legal fees are not incurred and, best of all, you will have no judgement against your credit record. This will remain intact enabling you to continue with your life and support your family,” explains Mr Barker.
“If you find yourself in financial distress, contact the bank immediately. At Standard Bank we have one simple rule; we will do all we can to keep you in your home. This is because we are in the business of helping people buy homes.”