South Africa’s economy is recovering from the recession and the property market is booming. The majority of this nation’s citizens have been caught inside the enclosed space, being pulled down by the credit crunch and high interest rates.
However, a number of honest citizens have lost their property in the struggle due to unemployment or becoming financially unfit to provide the mortgage payments. Many people’s homes that were repossessed could have been avoided if better decisions were made. Monthly car payments, coping with consumer goods inflation, spending money irresponsibly are factors which are overlooked by the majority of us. We tend to stick to our high standard of brand buying and spending of money as if inflation never took place. We are forced to push our credit further into the red zone, instead of making less use thereof, and in affect submit ourselves to the high interest rates. The irony of the matter is that the high interest rates were created to protect us from ourselves. Maybe it is time to join in with the concept of less lending of money, and spare ourselves from being left on the street.
The banks realized in their nervous state that the risk to borrow money to the public or to each other has become too high. This nervous state was the result of banks’ lenient lending to people who used their borrowed money into property everywhere. All of this leads to the well known term Credit Crunch. Lending of money will need to happen at a higher price, which means that the interest rate will need to rise. The dramatic turn of events now leaves these borrowers with a big loan, with huge payments, as well as a property which keeps decreasing in value. Obviously this has its effects on the inflation rate, and in the end your income won’t be able to keep up with your credit back payments. The only left option for the bank is to repossess the property.
Bank repossessed properties are excellent for investors and people who can afford buying into property, but if you are on the wrong side of the court, bank repossessed property is a name you would rather not hear or think about. You CAN alter your situation and get yourself to that better side of the court, investing in property in possession (PIP) and rather profit in these difficult times, by making the right choices!
Stop accumulating debt, evaluate your finances and life consistently, stay current on your payments, concentrate on your financial goals, relax, don’t panic and remain in front of your situation! Keep to these tips and keep your property from the bank repossession list.