FINANCIAL PRESSURE? HOLD ON OR LET GO OF YOUR HOME?
Category Property Ownership
Post-pandemic pressure is mounting as Covid-19 left its emotional -, health-, and financial scars on the lives of many people around the world. With general living costs on the rise, escalating interest rates, and no more 'masks to hide behind', many a homeowner is faced with the predicament of whether to sell his home to save the day.
FNB's most recent property barometer statistical analysis reveals that 18% of sellers across all price brackets sold their homes in February 2022 due to financial pressure. Interestingly though, is that this is most prevalent in the segment of homes valued at R750 000 and less. Could this be an indication that the dream of homeownership captured the hearts of thousands of first-time buyers at a time when interest rates were at an all-time low and the financial institutions were eager to harvest the ripened demand for finance? Were they over-sold and under-educated by all parties concerned and did they not head the caution not to finance their homes to the maximum? The answers to these questions will differ case by case, and it is not for us to point fingers at all.
The joy of stepping over the threshold of your first home can be overshadowed only by holding your newborn in your arms. The mere thought to give that up to save the day will let anyone cringe, and before making that final decision one should investigate every possible avenue to prevent giving up your home. Could you find a way to earn additional income? Could you cut non-essentials from your budget? Do you have 'luxury movable items that could be sold? Will your financial institution extend the term of your loan?
If all else fails, then only should you sell your home. You will find that a heavy weight is lifted off your shoulders and a feeling of relief spills over your mind and body. Proceeds of the sale could cover auxiliary costs like rates and taxes that mounted up and even take care of other debt. You are free to start over on a clean slate, and the time will come again when you can buy your next home - all is not lost!
A word of caution: if you find yourself in a tough spot with no other option available to you but to sell, make that decision sooner rather than later. It takes time to sell a property, and time for it to be registered in the name of the new owner. These months could be critical in preserving your good name and credit record, which is vital for you in moving forward in your life.
Buying property remains one of the best long-term investments one can make, and it can save the day for you. But, whether you are buying or selling, always proceed with caution, do your homework, and budget diligently.
Author: Adrie Barnard
