FNB released it’s property barometer for March on Wednesday this week. The results are unfortunately not very encouraging. According to the statistics property has suffered yet another year-on-year loss in March of -7.8%.
Demand for property has drastically dropped over the last few years as we saw the introduction of the NCA and a worldwide economic downturn. These factors contributed to creating a major oversupply of property where few are in a position to buy.
Recent figures have suggested that banks are approving less than 40% of bond applications due to strict adherence to the NCA. The NCA was introduced to stop consumers from incurring too much debt, this has of course negatively affected the property market and other sectors as well.
Late last year experts were predicting a turn around toward the end of 2009 and that property would then start to experience better growth again. For many homeowners that are desperate to sell this is an unfortunate prediction as they may slide into negative equity within months if their properties lose enough value.
It is unlikely that we will see a turnaround in the property market any earlier than the end of the year unless lending policies drastically change very soon. We will probably see many more homeowners lose their investments before the year is out.
What do you think? Is the market going to turn around before the end of the year?
The term distressed property refers to a property that has to be sold in an effort to recover any unpaid debt owing to the lender. This happens when a borrower is in arrears and has been unable to keep up with the bond repayments.
This is a legal term that refers to debt that had an expected agreed upon payment that is late or overdue. Also known as past-due.
The total amount that is paid annually to satisfy the obligations and agreements of a loan contract. This amount will consist of all the principal and all the interest that is paid over the year.
Bankruptcy is when a person or organization has insufficient assets or funds to repay their debts. Once they have surrendered all the assets they may have they are relieved of the responsibility of repaying their debt (by court order) and declared bankrupt.
When a person has insufficient funds or assets to repay their debts. When you are unable to repay the debt you owe you may be declared insolvent or bankrupt.
US President Barack Obama yesterday succeeded in getting a major financial stimulus bill approved by the House of Representatives. The financial package within the bill is huge and amounts to $819bn.
The US has suffered greatly and was the first major world economy to fall under the global financial crisis the whole world is facing. They have experienced huge job losses putting the average American under an enormous amount of financial pressure and pushing many into financial collapse.
Companies are expected to continue cutting jobs well into the next few years to save themselves financially which paints a bleak future for many financially stressed debt-laden Americans.
Pres. Obama has said in a written statement that the enormous stimulus package will create over 3 million jobs for Americans over the next few years. This will bring hope to many people who are expecting their financial situation to get worse before it gets better.
Give us your views on this decision.
The calculations used to determine whether a borrower qualifies for a mortgage is called qualifying ratios. There are two separate calculations: housing expenses as a percentage of income and total debt as a percentage of income.
When the monthly payment is not large enough to cover the principal and interest due on a mortgage it creates a gradual increase in the mortgage debt and is known as negative amortization. The shortfall is added to the remaining balance of the loan.
We South Africans may think we have stretched our household budgets to the absolute limit,but this is not always the case.Some of us spend far more money than we realise on things that need not be so expensive.
Trim your grocery bill to the absolute minimum where possible.If that means changing the store you buy from then so be it.If you really want to free up some cash shop around for the best deal and you may be surprised by how much you will save.Try and stop buying non-essential grocery items like snackfoods and sweets.All these items really add up.
Eat at home, we all know in most cases there is a huge difference between the price we would pay for a meal cooked at home and the same meal at a restaurant.Restaurants need to put a pretty big mark-up on their menus to cover all their costs and you the customer are the one to pay it.Don’t fool yourself into thinking takeaways will work out cheaper all the time, sit down and really work out how much each option costs.Don’t forget about about your takeaway coffee on the way to work each morning,if you cut these out it is also a great way to save about R10 a day.
If you do have a domestic cleaner consider reducing their work hours if possible.This will mean you having to pick up the slack and do the cleaning they don’t get to but you will be saving money along the way.
Lastly stop any other unnecessary spending on clothes and other luxuries.Suspend your satellite television service until you feel your finances have settled again.All of these belt-tightening ideas can be temporary or permanent changes in the way you run your household.
The first step in the right direction is to sit down and assess exactly what your necessities are and exactly how desperate your situation is.Many people’s financial struggles are due to the repayment of excessive debt and if you can see no solution to your trouble yourself contact your lenders and they may be able to assist you.