- The Risk Of Too Much Credit
Although many factors will influence your financial wellbeing, getting the basics right will go a long way towards planting a secure financial footing.
Unfortunately it is relatively easy to create unmanageable finances. This is especially true if you do not keep track of your income and spending habits or overextend yourself by incurring unaffordable levels of debt.
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If you feel that you are losing control of your finances it is advisable that you contact your creditors to explore the feasibility of restructuring your debt repayments. The advantage of reaching agreement with your credit providers is that with lower instalments your expenses may be at a more sustainable level and you are more likely to repay your debt. But discipline is required; new debt must be avoided and you should carefully assess your budget to ensure that your expenses match available income.
If you are not in a position to make suitable repayment arrangements with your credit providers, you also have the option of approaching a Debt Counsellor for an over-indebtedness assessment. For further information debt counselling, click here
If you feel that you need assistance with your home loan repayments please contact us on 086 111 3414.
Congratulations! The birth of a new baby is always a special time for your family. With the new baby come added responsibilities and expenses that will require careful financial planning. This planning however already starts with your maternity leave and important issues to consider at this time include:
- How long the maternity leave period will be,
- How much income you will receive during this time and if it will be sufficient to cover your living expenses, and,
- Whether you intend on returning to work.
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Depending on the outcome of this assessment, you may need to approach your credit providers to discuss whether options are available to rearrange your payments during your maternity leave. A proactive approach will signal to your creditors that you actively take ownership of your financial situation, which in turn may give them confidence to enter into repayment arrangements with you.
If you anticipate that you will require assistance during your maternity leave please contact us on 086 111 3414.
Retirement is a significant milestone that should be a time when you enjoy the fruits of a productive life. Yet, for many people retirement can also mean financial uncertainty; frequently retirement income cannot keep up with the demands of a rising cost of living; financial obligations such as home loans, vehicle finance and other credit obligations may place further strain on an already stressed financial situation.
Irrespective of your current situation, it is strongly advised that you discuss your financial needs with a qualified financial planner.
If you are experiencing financial difficulty at this time and need to discuss your options with SA Home Loans, please contact us on 086 111 3414
Divorce is a stressful life experience. Yet, even at this challenging time the best outcome is when both parties can agree on a settlement agreement without the need for lengthy and expensive legal action. Not only is the process of getting divorced quicker and easier, it also allows each party to start the new phase of their lives sooner.
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If both parties jointly entered into a home loan agreement with SA Home Loans, the settlement agreement and subsequent divorce order does not impact your financial obligations to us. SA Home Loans is not a party to the agreement and both parties will therefore remain jointly and severally liable for the outstanding balance.
In the event that the settlement agreement awards full ownership of the property to one party, effect must be given to that order by cancelling and registering a new bond. If this new mortgage loan application is with SA Home Loans, it will remain subject to our normal credit criteria.
To understand our requirements, or to give effect to the divorce order, please contact us on 086 111 3414.
To be retrenched from your work is a life changing event which requires that important financial decisions are made straight away. Foremost is the fact that a loss of income may make it difficult for you to maintain loan repayments or meet your other financial obligations. Retrenchment can therefore have serious long-term implications on your financial wellbeing. It is important then, at an early stage, to make a realistic assessment of your options. You should also approach your credit providers in a honest manner to discuss your current situation.
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In order to make an informed decision, you should consider the following questions:-
- Do you have retrenchment cover in place and how much income will it provide?
- What is the value of your retrenchment package? How soon will you receive the funds? Has your employer provided you with proof of my retrenchment?
- Will you be able to apply for UIF?
- What is the likelihood of you will find new employment in the near future?
At SA Home Loans we will carefully consider all the information that you provide to us with the aim of finding a workable solution that is in the best interest of all parties. Solutions may include payment plans, or assistance with the selling of your property if this is an option that you are considering. The assistance that we may provide is tailored to each client’s unique situation and will remain subject to our terms and conditions.
If you require more information regarding the options that are available to you, please contact us on 086 111 3414.
- Deceased Spouse
Few people are ever ready for this tragic event. Not only is it a emotional time but there are important financial matters that must also be dealt with. We believe that being informed about what must be done can help relieve some of the stress and uncertainty experienced during this difficult time.
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Collection All Relevant Documentation
An important element of responsible financial planning is to ensure that documents that are important in the event of death are stored in a safe, known and readily accessible location. A list of such documents could include:
- Insurance policies
- Marriage Certificate
- Children Birth Certificates/ Identity Documents
- List of assets
- Tax Returns
- Partnership or any other business agreements, as applicable
- Bank Statements
- Current billing statements
Furthermore, to start the process of winding up the estate a death certificate must be obtained.
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Reporting The Estate
In terms of the Administration of Deceased Estates Act 66 of 1965, the estate must to be formally reported to the Master of the High Court in order for it to be wound up.
After the estate has been reported, the Master appoints an Executor by issuing a Letter of Executorship (if the deceased’s assets have a gross value of more than R125, 000) or a Letter of Authority (if the deceased’s assets have a gross value of less than R125, 000). The role of the executor is to gather in the assets of the deceased in order to pay any taxes and other debts and liabilities left by the deceased. The balance of the estate will be distributed in accordance with the Will or in accordance with the provisions of the Act.
How The Estate Will Be Managed
The manner in which the estate will be administered will depend on whether the deceased had a valid Will in place:
- If there is Will the estate will be wound up in accordance with the terms of the Will.
- Alternatively, if there is no valid Will, the estate will be regarded as an Intestate Estate and will be wound up in accordance with the provisions of the Administration of Deceased Estates Act.
The Financial Position Of The Estate
“Benefits”” to the estate will strengthen its financial position which consequently will allow the estate to settle any outstanding claims that creditors may have. Examples include life insurance policies, credit life cover and pension or provident fund pay-outs.
The Benefit Of Life Cover
An important factor that influences the administration of a deceased estate is whether the home loan was secured with life cover or not.
If valid life cover is in place at the time of death, the proceeds of the policy may fully or partially settle the outstanding home loan balance. If no life cover is in place the balance on the bond as at date of death becomes due and payable. If the surviving spouse or remaining bond holders are unable to settle the full balance owing, one of the following three options will generally available:
- The surviving spouse or remaining bond holder/s makes an application to take over the bond;
- The surviving spouse or remaining bond holder/s may not qualify for a new bond and may require adding a surety to the application;
- If none of the above options are viable it may be necessary to sell the property. The proceeds from the sale will then be used to settle the balance of the bond outstanding.
Please see PRODUCTS
for more information on the importance of life assurance to you and your family’s financial security.
SA Home Loans and Deceased Estates
At SA Home Loans we understand how difficult a time this is for the family and surviving bondholders. We encourage you to contact us on 086 111 3414 so that we can discuss the options that are available to you.
- Insolvent Estates
Insolvency refers to a status of diminished legal capacity imposed by the courts on persons, companies, close corporations or trusts that are unable to service their debt obligations and where total liabilities exceed total available assets.
The aim of insolvency process is mainly to protect the estate’s creditors. This is achieved by realizing all the assets of the insolvent estate and using the proceeds to contribute towards payment of all or part payment of all outstanding liabilities. From an SA Home Loans perspective the outcome of the insolvency process is that the property in question must be sold.
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How is an Insolvency Application Brought?
Insolvency application can be brought about in a number of ways:
- Voluntary Surrender (Natural Persons/Trusts) - is brought about by a Debtor and the burden of proof lies on this party to show that liabilities exceed the assets.
- Compulsory Sequestration (Natural Persons/Trusts) - is brought about by a Creditor, who must show that they have a liquidated claim, that the debtor is insolvent (or committed an act of insolvency) and that an advantage exists to creditors to have the debtor’s estate sequestrated.
- Forced Liquidation (Companies and Close Corporations) - A forced liquidation occurs when a creditor or a member of the company brings an application to the High Court for the company to be liquidated.
- Liquidation by special resolution (Companies and Close Corporations) - The members of the company make a decision to liquidate the company by special resolution.
Final Order Is Granted
Once the final order is granted by the court the individual or trust is sequestrated and the company or close corporation is liquidated. If an individual has been sequestrated, a Trustee will be appointed to attend to the administration of the estate. Similarly, if a company or CC has been liquidated a Liquidator would be appointed.
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The role of the Trustee or Liquidator is to assume the financial responsibilities of the insolvent party. This entails the following:
- To investigate and list all the movable and immovable assets of the insolvent estate;
- To determine the extent of the liabilities of the insolvent estate; and
- To realise (sell) all the movable and immovable assets of the insolvent estate.
Obligations Of Bondholders In The Event Of Insolvency
In the event of insolvency, the obligations and responsibilities of bondholders and sureties are influenced by their legal relationship with the insolvent party:
Bondholders married in Community of Property
By virtue of the fact that the spouses are married in Community of Property both spouses will be declared insolvent and a Trustee will then deal with a joint insolvent estate.
Bondholders married in terms of an Ante Nuptial Contract
SA Home Loans will determine if there is a solvent bond holder associated with the bond. If so, then it is the responsibility of the solvent bond holder to ensure that the bond repayments remain up to date. If the bond is not up to date, SA Home Loans can proceed with legal action against the solvent bond holder to cure the default.
The consent of the solvent bondholder is required before the property can be sold privately as an asset in an insolvent estate. The solvent bondholder remains responsible for any outstanding liability after the property is sold.
A Company or CC Is Liquidated
With regards to a SA Home Loans mortgage bond, sureties will be held liable for any shortfall which is outstanding on the mortgage bond after the sale of the property. Furthermore, in the interim, whilst the liquidation process is underway, home loan repayments must still be met. If the bond falls into arrears, SA Home Loans can proceed with legal action against the sureties to cure the default.
- Home Loan Instalments Paid Via Salary Deduction
If your loan was granted on the basis of “salary deduction”, the monthly home loan instalment will be paid by your employer directly to SA Home Loans via salary stop order. Once your bond is registered, you will need to ensure that the stop order is established. Failure to do so may result in your bond going into arrears, with negative consequences for your credit record.
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The following step with guide you in implementing your salary stop order.
- On registration, SA Home Loans will provide you with a registration pack, including a Z299 form, which is required to establish the salary stop order. If you have provided SA Home Loans will an e-mail address this registration pack will be e-mailed to you directly after your bond has been registered.
- t is imperative that you contact your HR department, provide them with the Z299 form, and ensure that they establish the monthly salary stop order.
- SA Home Loans perform regular follow-ups after the bond registered and will request updates on the progress of establishing the salary stop order.
- It is important to note that quarterly rate reviews may result in a change to your instalment. When this happens, you will be required to amend your salary stop order accordingly. In the event of a rate increase failure to amend the salary stop order may result in your home loans going into arrears.
Login to our website (https://www.sahomeloans.com/sahl-secure/Account/Login) to download the Z299 form or call 0861 888 777 should you require any further assistance.
- Value Of Maintaining Your Property
In addition to displaying a natural pride in your home, maintaining your property has clear economic benefits. Wear and tear is unavoidable and if left unattended minor hiccups can become large maintenance headaches. Investing small amounts on a regular basis in the upkeep of your home may be more cost effective than a large cash outlay on a maintenance emergency later.
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A well maintained property is more marketable should you decide that it is time to sell. When you put your property on the market you are in competition with other sellers for the interest and cash of prospective buyers. Buying property is to some extent an emotional decision that can only be positively re-enforced with a well presented home. An attractive property also generates more interest, which translates into a greater demand and very likely a higher price when your home is ultimately sold.
When you are financially distressed it is not easy to balance a budget. Whilst it is possible to forgo luxuries, some necessities, such as groceries, education, medical aid and others must always be provided for. Even in these difficult times it would also make good financial sense to set some funds aside to maintain your property. In the event that you have to sell, a little maintenance along the way could mean a higher sales price that repays what you owe on the bond and possibly leaves you with a surplus. Such a timely cash infusion could just be what is needed to ensure that you and your family regain your financial footing.
What should you focus on? Smart prioritisation could really extend the value that you derive from each Rand spend on the upkeep of your property. Thus, chores around the house such as gardening, touch-up painting where it is needed, replacing cracked windows, fixing gutters and cleaning carpets, may not sound important; but these are the things that are impactful and will leave a good first impression with prospective buyers.