Struggling to meet your bond repayments on your property? Here’s what you should do…

Julie Brownlee, Fsp Invest, 24 Oct. 2014

Tags: property, bond repayments, financial hardship, lender, problems repaying bond, can’t pay bond,



Despite your best planning and intentions, changing circumstances and events can have a big impact on your finances.

If you’ve lost your job, been suffering from an illness that affects your ability to work or had to cough up a lot of money to cover a large unexpected expense, what can you do?

The worst thing you can do is nothing. It’s vital you take steps as quickly as you can to deal with the situation.

Let’s take a closer look at your options…



Speak to your lender as quickly as possible


Your lender will be far more likely to be able to help you if you talk to them as quickly as you can about your changes in circumstances.

The worst thing you can do is miss bond repayments on your property.

If you speak to your lender, they may be able to sort out a repayment holiday for a few months while you try to get back on track. Or they may be able to recalculate your bond over a longer period, reducing your monthly repayments in the process.

You could also take this time to find other sources of income, such as a lodger. But it’s not advisable during times of financial hardship to start borrowing money. You’ll just have more to pay off.


Do you have negative equity in your property?


Negative equity is when you’ve borrowed more than the property is now worth. If this is the situation you find yourself in, it’s in the lender’s interest to help you until the house is worth more in the future.

If the only solution is selling your property, the lender isn’t going to recoup enough money to settle your bond.


Do you have positive equity in your property?


This is when the value of your property exceeds your outstanding bond. If this is your situation, you could think about selling your property and then you can settle your bond. Or you can buy a less expensive property with lower bond repayments.


Looking after your property investments


Once you’ve bought your first house, a good rule of thumb is to keep a minimum of 25% of clear equity in your home. This means if anything happens which affects your ability to pay your bond repayments, you have a safety net.

This safety net will give you time to sell your property if your circumstances change and to buy a smaller house.

So there you have it, what to do if you’re struggling to meet your bond repayments on your property.

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