The recent rate hikes have negatively affected a lot of homeowners. Some people battle to make their bond repayments and others are forced to sell their homes. Selling your home when you are experiencing financial trouble is not a panacea in today’s market. Because interest rates are high, and the banks require large deposits, people are just not looking to buy right now. Because of this, when homeowners struggle with meeting their bond payment, they often end up with a property they cannot afford. It is these situations that generally lead to repossession.
Banks simply do not have options. When a bondholder fails to meet their financial obligations, they have to step in. If a property owner misses several payments, they will be afforded a pre-foreclosure grace period. Sometimes that might be a few weeks, sometimes a few months. After that, if payments are not brought up to date, the banks seek to cut their losses.
As far as buyers looking to purchase repossessed property, there is little risk. The buyer will not have to pay the transfer duty, and usually the bank will pay any other outstanding debts. This would include things like property taxes or monies owed to the IRS. This allows the bank to sell the house with a clear title. Usually property that is repossessed is sold at a discount. In addition, because they are anxious to find a buyer, the bank might be willing to relax their lending criteria, making loans for repossessed houses much more assessable.
Buying repossessed property is very much like buying any other property. If you need to finance the home purchase, you can apply at any bank for a bond, just as you would do on any other kind of home purchase. All banks have listings of their repossessed properties. If you are going to need a bond to purchase the property, it might be best to simply deal with the bank directly.
Definitely ask to see the property. Do not allow the discounted price to sidetrack your common sense. When you purchase a repossessed home, you buy it as is. Because of that, it is smart to find an expert to inspect the home and give you an estimate on repair costs. Then, when you take out your bond, include the repair costs in the overall amount. In addition, you must think about location, and you might want to ask about the crime rate and schools.
Once you have made your decision, and you wish to purchase the repossessed property, you complete an offer to purchase. Once you submit this to your bank, you can apply for your bond. This can be done at any bank. Once the bank accepts your offer, the financing must be approved. From this point on, the transfer of property will proceed just as it would for any kind of property purchase.
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