Debt Consolidation
Using Property
A smarter way to consolidate your debt
Struggling with overwhelming debt? Our unique Sell & Buy Back solution allows you to leverage your bonded property to settle debts, rent your home, and regain financial stability with the option to repurchase your property.
Settle debt using property
Are you a homeowner in South Africa facing mounting debt, multiple high-interest payments, and the stress of a challenging financial situation? Traditional loans might not be an option, or you might prefer a different approach to unlock the equity in your home. NH Finance offers an innovative solution: Debt Settlement through a Sell & Buy Back arrangement.
This powerful strategy enables you to use the value tied up in your residential property to settle your outstanding debts without applying for another loan or bond. You temporarily sell your property, use the generated funds to clear your financial obligations, then rent your home back for an agreed period, all while retaining the crucial option to buy it back in the future. It’s a strategic move designed to simplify your financial life, reduce stress, and provide a clear path to regaining full ownership of your property.
You should apply if you’re…
Homeowner with High Equity & Challenged Credit
This is for homeowners with substantial property equity and poor credit, seeking a way to clear overwhelming debt while remaining in their home.
Asset-Rich Business Owner Facing Liquidity Issues
Ideal for business owners with property assets but temporary cash flow problems, needing rapid debt settlement without impacting their core business.
Individual Seeking a Complete Debt Reset
Perfect for those desiring a definitive break from debt by leveraging their home’s equity, allowing them to clear all obligations and work towards repurchasing their property.
How to consolidate debt using property?
Debt settlement using the equity in your property, also known as the Buyback Sale, Sale and Leaseback, Rent to Buy Back, or Rent to Own, is an alternative to traditional debt consolidation loans. Essentially, you settle your debts by monetising your property’s equity.
Here’s how this unique process works:
- Sell Your Property to a Purchaser: You enter into an agreement to sell your bonded property to a pre-approved purchaser. The profit generated from this sale (after settling any existing bond) is then used to immediately settle your specified high-interest debts (e.g., personal loans, credit cards, store cards, car finance).
- Rent Your Home Back: Immediately after the sale, you enter into a rental agreement for the property with the new owner. This allows you to continue living in your home without disruption, paying an agreed rental amount over a negotiated term, typically between 12 to 24 months.
- Exercise Your Buy-Back Option: Crucially, you retain an exclusive option to purchase your property back at any time within the agreed 12 to 24-month rental period. The buy-back price will be agreed upon between you (the client) and the purchaser at the outset.
- Re-acquire Your Property: When you are ready to exercise your buy-back option, we can assist you by facilitating a new bond application process, approaching various banks to help you secure the best possible deal. You also have the flexibility to use your own bank or bond originator.
Ideal Property Profile
This solution is ideal for homeowners whose property meets specific criteria, indicating sufficient equity to make the process viable for debt settlement:
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- Types of Property: Any type of residential property is considered, though specific criteria apply to vacant land.
- Minimum Property Value: Your property must have a minimum value of R 1,000,000.
- Maximum Property Value: There is no maximum property value specified.
- Bond Status: Ideally, your property should have a bond of less than 35% of its value (e.g., for a R1 million property, the bond should be R350,000 or less). This ensures sufficient equity is available for debt settlement.
- Credit Profile: All credit profiles are welcome, making this an accessible option even if your credit score has been negatively impacted by past debt.
- Exclusions: Certain geographical locations may be excluded (details to be confirmed).
Your Buy-Back Option
- Agreed Rent: You will pay rent at an amount agreed by both parties to the agreement, ensuring transparency.
- Flexible Term: The rental term can be for 12 to 24 months, providing you time to stabilise your finances.
- Re-Purchase Anytime: You can buy the property back anytime within that 12 to 24-month period, giving you control over your timeline.
- Agreed Buy-Back Price: The buy-back price is fixed and agreed upon at the outset between you and the purchaser.
FAQs
Is debt consolidation using property a loan or a sale?
It is primarily a sale of your property. However, it’s a unique sale structured with a clear right for you to buy the property back, making it a powerful debt settlement tool that leverages your property’s equity.
What kinds of debts can I settle?
You can typically settle various forms of unsecured debt, including personal loans, credit card balances, store card accounts, and often vehicle finance.
What happens if I can't buy my property back within the agreed timeframe?
If you are unable to exercise your buy-back option within the 12-24 month period, the property remains with the purchaser. It’s crucial to plan diligently during your rental period to ensure you’re in a financial position to repurchase.
Will my credit profile affect my eligibility for this solution?
No. A significant advantage of the Sell & Buy Back option is that all credit profiles are welcome. This makes it an accessible solution even for individuals who may have struggled with debt and have a less-than-perfect credit history.
Can I still live in my house during the buy-back period?
Yes, absolutely. A key feature of this process is the rental agreement, which allows you to continue residing in your property for the agreed 12 to 24-month term while you work towards buying it back.
How is the buy-back price determined?
The buy-back price is mutually agreed upon by you (the client) and the purchaser at the initial stages of the agreement. This provides transparency and certainty for your future re-purchase.
Can you assist if I have a bad credit profile?
Yes. This is precisely who we can assist.
Can you assist if I have a good credit profile?
Yes.
Is there a minimum and maximum home/property value?
Yes, no properties less than R 1 000 000 value will be considered.
What is the maximum debt amount?
50 % of the value of your home/property
How long does it take?
Submit the required documents and processing starts.
How much does it cost?
See examples on home page.
Can I rent my home/property back after it is sold?
Yes, at an agreed rental
Can I buy my home/property back?
Yes, within 12 – 24 months and this is negotiable.
What types of property can be used?
All types but not vacant land, unless it meets very specific criteria.
What Documents Are Needed?
- Proof of address
- Erf details and street address
- Latest municipal rates statement
- 3 months bank statements
- Latest bond statement
- Credit check authority
- Marital status confirmation
- List of all other debt over R10 000
- Proof of Income ( salary slips or business income)
- Copy of ID
- Photos of property
USE PROPERTY EQUITY TO CONSOLIDATE DEBT
Use the tried and tested Sale and Buy-Back method.
Important Notes and Conditions
1. We refer your enquiry to third parties and you deal direct.
2. This is not a loan product.
3. This is property transaction solution i.e. Sale and Purchase
4. Neither us, nor the third-party vendors, is a FSP registered
5. Neither us, nor the third-party vendors are registered with the NCR
6. Neither us, nor the third party, get involved in the settlement of your debt
7. The decision on whether to enter into a transaction or not, is at the sole discretion of the
purchaser.