If in financial trouble, talk to your bank

CONSUMERS struggling to repay their home loans – or any loans, for that matter – often believe they can get away with short-payments in the months they are struggling.

But this is not the case, the banks say. “A client can short-pay their repayment only with the consent or agreement of the creditor, says FNB’s Mfundo Mabaso.

“FNB will offer options such as special arrangements allowing a client to short-pay, but only for a specified and limited period. This is to give them some time to either recover financially or decide whether or not they can still afford the property.

“If a client short-pays without consent/agreement, there is a credit bureau listing risk as well as legal action risk which could result in the loss of ownership of the property.”

Absa’s Mbuyiselo Khumalo agrees: “When a customer finds they are unable to pay the full instalment, they need to contact their home loan provider and inquire about arrangements that could be made. Each customer’s situation is unique so it is important for the customer to engage with their financial institution.”

Communication, the banks say, is key in any type of financial struggle.

“It is always advisable for people to be honest about their financial situation,” Mabaso says.

“If the financial position of an individual changes so drastically that they are no longer in a position to meet their credit obligations in full, it is recommended they consider downscaling to a property that is more within the range of what they can pay. This might mean selling the current property. Selling early is advantageous to an individual because they might fetch a good price before they fall too far behind with their repayments.”

Absa Home Loans also offers a variety of assistance options to customers experiencing short-term financial distress.

“We look to accommodate the customer with a lower instalment for a specific period of time.

“Should the distress be of a long term nature, we have a dedicated team to assist the customer in selling their properties and moving into a more affordable home,” Khumalo says.

COMMUNICATE Homeowners should discuss their financial situations with their banks in order to reach an agreement about repayment.