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Keep up your bond repayments

Even in the toughest times, it’s important to keep paying your monthly instalments. This is how you can do it.

Your home is almost certainly your biggest and most important asset, so you need to do all you can to protect it. However, if you fall behind in your mortgage repayments during tough financial times, you may not be able to catch up later and could end up losing the roof over your head.

WATCH : Keeping up with your home loan repayments.

Following the recent spate of increases in interest rates, along with the rising cost of food, fuel and electricity, many households are feeling the pinch. The start of the year is an excellent time to take stock and assess what steps you need to take to help you through financially difficult months.

Expenses

Get your whole family involved in deciding how to tackle the problem. There may be a number of nice to have items that you can do without or can cut down on. These could include little-used gym memberships or monthly subscriptions that need to be re-assessed.

Other expenses to consider are grocery expenditures and cellphone accounts. Make sure you are not buying too much food and throwing some of it away, and check whether cellphone contracts can be capped or if converting to pay-as-you-go might save some money.

Even small savings each month will make a difference, and you don’t have to cut back forever. It will just be for a time until you manage to get ahead of the bond repayments again.

Lenders

If, after cutting all possible expenses, there is still a shortfall on your monthly home loan instalment, it is best to contact your bank and discuss the problem.

Banks would always prefer to try to help homeowners find ways out of financial difficulties rather than repossess a property. Your bank will want to help you keep your home and will only resort to repossession as a last resort.

One of the solutions is to extend the term of the bond, for example, from 20 years to 25 or 30 years. This will reduce the monthly repayments. However, you will end up paying more in interest on the loan over the extended period. So be sure to try and put every spare cent into your home loan whenever extra funds are available.

Proactive

No matter how difficult your financial situation is, being proactive and working on sorting out the problem is always the best way to find solutions.

Communication is key, so it’s important to discuss the situation with your family, your bondholder and a reputable financial adviser if needed.

Writer: Sarah-Jane Meyer

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