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In the current economic climate many homeowners are battling to keep pace with their monthly bond repayments. All because of the rapid increase in home loan interest rates. You could be one of those looking to avoid the next round of rate hikes. One way to do that is to re-negotiate your bond rate. To find out how to do this, watch Yilungelo Lakho (It’s Your Right) Tuesday 18 October at 4:30 pm on SABC 1, with a repeat on Wednesdays at 11 pm on SABC1.

With the focus of the interview being on how to re-negotiate/review a home loan interest rate with a bank in order to settle on an affordable financial outcome, homeowners are not having it easy this year. Many have no choice but to fork out more cash to meet their home loan repayment obligations. This monthly cycle looks set to continue as the Reserve Bank has hinted at further rate hikes. Renegotiation of home loan interests rate is one of the options. What does it entail?

Herewith talking points that they will be touching on during the interview:

  • Is there a criteria banks use to grant/refuse a home loan rate reduction?
  • How often can one ask for a rate decrease?
  • Won’t shopping around for a better interest rate affect one’s credit score? (The question is based on the practice creditors use to check if one qualifies for a loan. It’s known as soft or hard credit check.)
  • Does one’s credit score have a bearing on a request for rate reduction?
  • At what point can you ask for a reduction?
  • What risks are there for a consumer who switches banks to get a better rate?
  • Does a reduced rate remain even after the repo rate has come down or gets adjusted accordingly?
  • What other options are there that consumers can use to make their case – FLISP (Please note, a new dimension on this concept has emerged. Apparently, this housing subsidy can be used on old home loans. Details of this aspect are pending and little consideration will be given).
  • When moving your home loan to another institution, does it mean restarting the bond registration process?
  • Can an ordinary person conduct this exercise or is a specialist advisor needed for bargaining advantage?
  • Are our banks, generally speaking, open to accommodating such a request?

Is such an exercise worth it or are there more useful methods of easing the financial squeeze when it comes to home loan repayments?

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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