In the current economic climate, many properties are being sold on auctions and the lenders, being the financial institutions, end up being forced to write off millions of rands. These shortfalls, in most instances, cannot be collected from the defaulting mortgagors.
Two products combined can assist both buyers and sellers of property, and can also assist mortgagors and banks prior to a sale in execution.
The concept is Rent with an Option to Buy, supported by Rental Insurance.
The rental to be paid by the Purchaser can then be insured via Rental Insurance, whereby a national insurance company underwrites residential rental, which will assist mortgagors who rent out their properties. This is how it works:
Considering this option in comparison with the Installment Sales concept, we would propose this option as the more preferable one to sellers who cannot sell their properties. Buyers then don’t need to obtain and of the following:
The Rental Insurance forms part of this concept as the Mortgagor and the Financial Institution receives a three month rental guarantee.
Can’t sell? Rent with an Option to Buy
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