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From moving into smaller homes to trading-in fuel-guzzling SUVs for modest hatchbacks – consumers have been adjusting their household budgets to stay afloat.
Economic tough times and shrinking pockets have led many South Africans to consider turning their lifestyles down a notch to cope with inflationary pressures.
No doubt, 2023 has been a pocket-pinching marathon for many.
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Whether you’re at risk of losing your home due to difficulty making loan repayments, or are planning to trade your larger-than-life home for a modest nest – it’s always advisable to weigh your options.
“It’s important to consider that there are many factors that can influence a sale before putting your house on the market,” said Angela Glover, FNB Head of Product for Home and Structured Lending Solutions.
Factors include the geographical location of the property, condition of the house as well as activity on comparable properties.
Acknowledging that circumstances change, making it difficult to afford credit, Glover suggested some steps.
“Selling your property might be a good idea if your circumstances have changed and you are no longer able to afford it, or if the property no longer meets your needs,” Glover said.
If you’re struggling to keep up with loan repayments, it’s not all doom and gloom from an instant – there are still some options you can explore.
For starters, mortgage home owners can contact their lenders to make payment arrangements as an attempt to bring their accounts up to date.
“You may also speak to an expert consultant to work with you to find a solution that allows you to keep your home and maintain your repayments,” she advised.
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Seeff Property Group chairman Samuel Seeff said despite advocating lower interest rates amid economically stifling high interest rates – the reality is that rates could be high for some time.
“While we cannot control that, making adjustments can help consumers, homeowners and prospective buyers navigate the new market realities much better,” he said.
The property expert also echoed the same sentiments advising consumers to focus on reducing debts, especially ones with high interest rates such as credit cards and store accounts.
“This will free up cash to further reduce your debt. Do not make further debt, rather cut back on your new living costs,” Seeff explained.
Paying a little extra on debt repayments can also alleviate financial pressure if ever you find yourself struggling to afford payments.
Seeff advised homeowners struggling to pay back their home loans to explore alternative payment arrangements, further urging them to avoid bad debts at all costs.
“Your home is vital. Avoid financial distress on your home loan by immediately contacting your mortgage bank if you are battling to keep up with the repayments so that you can make alternative arrangements.”
However, if push comes to shove, its always advisable to be transparent throughout the process.
“If you’re selling for urgent financial reasons, you should be upfront with the agent so they can assist you in the best way possible,” Seeff explained.
“You may be at a life stage where you could downgrade your home and benefit from an easier lifestyle and added cash by going smaller,” he concluded.
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