Falling Behind On Home Loan Repayments

Falling Behind On Home Loan Repayments

A home loan is a long term commitment, it is very likely your biggest financial commitment you’ll ever make. The average term on a home loan is about 20 years and during that time you need to continually ensure that you’re not falling behind on home loan repayments.

The problem is that 20 years is a long time and very often homeowners do go into arrears, or are not able to pay their bond instalments for a few months.

Home loans often need two incomes to support their instalment, and if one income changes or drops suddenly, that can have a significant impact on your affordability, which means you might battle to meet your mortgage instalments

What should ideally happen, is that people should look to try and create a little bit of scope (or buffer) by paying in extra into their mortgage when they can. An access bond is ideal for this purpose. That way. if you begin falling behind on home loan repayments, the bank will look at things more favourably should something occur.

What to do you are falling behind on home loan repayments

The first thing you should consider is to approach your bank and be proactive in trying to find a solution and work with your bank to manage any arrears on your home loan account.

A lot of people get into arrears for many different factors, sometimes its just overspending on a lifestyle that on a long term basis they cannot afford.

Changing your lifestyle can help to make you bond repayments more manageable.

Another option would be to down scale you home, by selling up and buying a smaller property. Smaller properties are not only cheaper and usually require less costly maintenance as well.

Alternatively, you might consider a sell-to-rent-back option, which means you won’t have to move out of your home at all.

Note, if the mortgage starts to get more seriously into arrears, and multiple payments get missed, obviously there is a consequence that your could lose your home.

Affordable Home Loans

Affordable Home Loans For People With Bad Credit

All the major banks in South Africa are currently offering a full 100% home loans to clients who fall into the affordable housing sector. This is an initiative that has been supported and promoted by the highest levels of government and the private sector has certainly responded to this initiative.

More affordable home loan products have been made available and a number of affordable housing projects have already been completely. This bodes well for the future as more and more South Africans are able now able to become homeowners.

Securing one of these 100% affordable home loans isn’t very easy though. The banks are still very cautious about lending finance for a long term. The average home loan term is between 20 and 25 years. That is a very long commitment.

When it comes to people with poor credit ratings, the problem is that very few of these initiatives and projects are aimed at providing affordable home loan for people with bad credit.

Personal Loans and credit cards are being pushed in-front of many consumers and few of them are really able to manage these financial commitments in a responsible manner.
South Africa is filled with millions of consumers who are unable to repay these loans, resulting in bad credit rating.

Lack of education, services and guidance is another problem. There seems to be very little help available, for those who are trying to climb out of their debt problems and who are trying to resolve those bad credit issues.

“Debt is like a comfortable bed – easy to get into, but tough to get out of.”

Affordable home loans for people with bad credit, just simply don’t exist at present.
But, I suspect that this is a problem that won’t last too long. There is a huge market available to a company that would be willing to provide an innovative finance option to clients with poor credit ratings.

Quickly Save For A Home Loan

7+ Creative Ways To Quickly Save For A Home Loan Deposit

While most banks are currently offering full 100% bonds, these bonds are really only available to a small number of applicants that satisfy some very high requirements.

Most buyers are forced to put down a deposit before they are able to secure a home loan. The average deposit required currently ranges between 5% and 10% of the purchase price.

That is a quite a substantial sum of money to try and save, but here are some really creative ways to give you a quick boost and help you get started.

In a tough economy it may seem unlikely that you’ll be able to find or generate some extra income to use toward a home loan, but with a little creativity and some determination you’ll be well on your way to getting the new property.

1. Recycle
Save the Earth and some cash at the same time! Take your glass, aluminum cans, plastics, and more to the recycling plant and get money for them. It’s not much, but it can all go into your fund.

2. Cut on your traveling costs
Cut back on everyday travel, walking, taking the bus, or riding a bike to save on petrol and car maintenance costs.

3. Get rid of unused clothes
You have a bunch of perfectly good clothes or shoes that you never wear. Clear out your cupboard and sell them to a local second hand clothing store or online.

4. Eat at home
If you tend to get out often, cut out the meal at a restaurant and eat at home first before heading out.

5. Make energy saving a family mission
Electricity costs are growing so fast these days. Why not make it a fun task to see how much you can save on your electricity costs in a month.

6. Replace one expensive habit or activity with a cheaper alternative
Saving money doesn’t mean you can’t have anymore fun. Just replace one or two expensive activities with cheaper alternatives.

7. Your skills are valuable.
Your skills and unique talents are valuable. Identify what you’re skilled at and use that skill to produce something of value. eg. baking, industry advice, crafts etc…

8. Allow others to participate in your saving project
Once people find out how well you’re doing with your saving project, they’ll be inspired. People always want to be part of something amazing and inspiring, allow them to make small contributions to your fund. This is also called crowd funding. 🙂

Installment Sales – Buy Your House Without the Bank

Securing a home loan to finance the purchase of a new property has become considerably more difficult in recent times.

Although interest rates are at record low levels, most buyers are still struggling to meet the strict requirements of get a bond.

But, as the problem continues to grow a number of alternative solutions are becoming very popular.

Installment Sales is one alternative that many buyers are using these days to buy houses without involving a bank at all.

What are Installment Sales?
Basically an installment sale is an agreement between the buyer and seller where the buyer agrees to acquire the property in installments over a period of more than a year and less than five years.

The real benefit of an installment sale is that if the buyer does not need to apply for a home loan. Only at the end of the installment period will the buyer need to close the transaction via a home loan or cash.

The biggest problem with these types of agreements is – of cause – what happens if the buyer defaults on his monthly payments?

To protect the seller in the case when the new buyer defaults, the contract states that the all previous payments made by the buyer will be lost and the property will revert to the seller again.

The Secrets 100’s of Buyers Are Using To Secure Their Home Loans

Are you interested in finding out about some of the secrets that 100’s of buyers are using to improve their chances of qualifying for a home loan?

We’ve spoken to professionals in home loan and property industry, and asked them to share their knowledge and experience with you. In the process, we managed to uncover some of the best kept secrets about home loan applications.

Securing home loan is certainly not as easy these days as it use to be. The introduction of the National Credit Act, and the rise of the global credit crunch have made the banks very cautious. They almost seem unwilling to lend any finance for property purchases.

Despite this, some people are still able to secure up to 100% home loans for their new properties.

How is it possible, we wondered, that some people are getting 100% home loans while others are being rejected?

Our research has helped to reveal at least 5 key factors that could greatly influence your home loan application.

While many people have already benefitted from the information we want to share with you, the truth is that most potential homeowners don’t know about these tips.

Those are the ones who lose out on the chance to avoid paying rent, and actually own a property of their own.

Are You Interested In Finding Out About The Secrets? Add you name and email address below, for exclusive access to this valuable resource.

Stop Renting. Get Your Own Property.