Are you woried about missing your homeloan repayment over this #Covid19inSA #LockdownSA ?

The banks have come to the party to assist with Payment holidays, But this is no free lunch, what does it mean for you ?

——Please Share for Awareness——

#WednesdayMotivation

This thread is a mini series to educate #homeowners on the True Implications of a Payment Holiday on your Homeloan.

The following topics will be covered this week:

1. What is a payment holiday
2Theee month relief from banks
3 consequences of a payment break
4 Pros and Cons

A lot is happening in South Africa, #COVID19, downgrade to junk status, ongoing technical recession, GDP growth forecast at almost zero, and the #LockdownSA that has brought our economy on its knees with people not going to work.

Some of us are just worried if we will receive our next salaries,whether partially or not at all. We have monthly debt repayments such as homeloans. None of us wants to lose our homes over this period,what are the options for us?

Banks have offered payment holidays

What is a Payment Holiday?
This is a temporary relief from honoring one’s financial commitments towards their debt,in this case, your homeloan.

Banks have offered a payment holiday for April,May &June

This is a much needed relief, but what are the Ts n Cs? Will we suffer later?

The Key Term that we all should look out for when taking this payment holiday is: CAPITALIZED interest.

This may make the deal leas desirable than we had thought it was, after all, there is no free lunch, and banks and going out of their ways to lose money.

Capitalization is the process of adding expenses into the overall price of an asset, i.e the Bank will add unpaid homeloan interest and other costs back into the principal amount owed. This is mostly offered to delinquent payers not to lose their homes through repocession

However, a capitalized loan is more expensive. Since interest paid on the hone loan is compounded daily,the higher the principal amount the higher your monthly payments ,the higher the total interest,the higher your total home loan repayments

According to the FNB CEO, it will take most affected clients who take the payment three months Payment holiday between THREE to FOUR years to pay back these monies

Monies owed just for a mere 3 months of a payment holiday

For more information, Here is the link to the full article: https://www.linkedin.com/pulse/true-implications-payment-holiday-your-home-loan-nthato-jay-aar