How to avoid property repossession
Property repossession is the fear of everyone who is in debt because of a mortgage or a credit. But it can be easily avoided if you keep yourself to a couple of important rules which you apply before, after or during being a debtor. Let’s see some of the most important points.
- Do your best not to opt for credit or mortgage - The key difference between a credit and a mortgage is, that while you won’t need a guarantee for a normal credit, when the sum gets all the higher, then there needs to be a liability or a real estate that’s provided as a guarantee. More often than not this guarantee is the property one wants to buy. This is possibly the worst case scenario as well.
- Even if you opt for a credit/mortgage do your best to cover at least 50% on your own - If you ever opt for a credit make sure that you do have the means to cover at least 50% of the whole sum, because this way, the repossession will not be an easy process. Also you are much more covered when it comes to your part as the owner of a property or any other sort of liability. We are well aware that these days it is not easy to collect money but still be extremely careful when it comes to credits because the interests and all the additional costs will make it harder to pay off than you would expect.
- Have as much of a guarantee as possible to cover any costs in the case you become unable to pay for a while - This means to make sure you have money that you have segmented or have on savings accounts in order to be able to pay the debt off for a couple of months in case anything happens.
- Always opt for a good credit insurance - It may seem an unnecessary addition to all the costs you will need to pay each month, but it can prove to be a huge help in case anything happens which may stop you from paying your credit off. Insurance options are always offered along with the credits. Depending on your current financial situation, opt for an insurance which is not challenging to pay but still offers enough of a guarantee to help you in case anything happens.
- Never opt for more credit to pay your existing credit off - Avoid debt trap by opting for another larger credit only to pay off your current credit because it may lead to an absolute disaster and leave you so much in debt that you will not be able to know when you will ever be able to pay it all off. Debt trap seems to become a bigger and bigger issue in many countries that’s why several banks and credit institutes now have set up more serious conditions on credit applications.
Keep yourself to most of these rules and you won’t get even close to your property or vehicle repossessed.