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Avoid home repossession

By admin
23 October 2013

If a homeowner loses their job and can no longer pay the bond, what happens? Can insurance be taken for this possibility?

One can get insurance cover in the case of retrenchment and disability. One must, however, specifically apply for it and it may cost more than normal life insurance. Life insurance policies do not automatically include cover for retrenchment or disability – it depends on the type of policy that is chosen and paid for.

What happens in the case of death?

If the homeowner dies and he/she did not have life insurance, the bank can claim the balance owing on the bond account from the deceased’s estate. If the estate does not have enough money, the bank can take legal action and obtain judgement. The house can then be sold at an auction. A family member can also buy the house from the estate. The process is exactly the same as with any purchase of a home – the purchaser must obtain finance from a bank.

The Ombudsman for Banking Service provides customers with a free informal dispute-resolving service. Call them on 011 838 0035.