For some, even the title of this piece alone will tap in to increasing stress levels as many are engaged in an urgent bid to find practical solutions to handle your mortgage woes. I am a mortgagor too, and oh before I go any further, quick clarification, a mortgagor is one who has used his property to secure a home or property loan for the term the facility will run. Whilst we are all feeling the pinch of the economic crisis in Ghana, my Cedi monthly repayment hasn’t changed and I cannot imagine that barely 6 months in for those who have dollar denominated mortgages, you need 2-4 times the cedis equivalent today to buy and make good your monthly repayment in dollars! That is enough to keep anyone up at night, so let me not bore you further with the courtesies, it’s probably a luxury you don’t need now and simply want the scoop or “apor” on the relief measures available for mortgagors in such dire times as the cedi freely depreciates.
Apply for a payment holiday
The good book says in Matthew 7:7-11 - Ask, and it shall be given you. As simple sounding as it is, if you believe and practice this principle you would have received a lot of great things in the past. Really and truly, that’s all it takes sometimes- ASKING. One of the biggest reliefs from mortgage repayment stress is when your lender grants you a repayment holiday. Sounds too good to be true at first but if you rid your mindset of the lender being a monster, out to skin you dry, you will realize that they actually do put human faces to your difficulties. Once you make a solid case on your own merits, which include good credit history or being credit worthy, you could be granted between 3-6 months holiday per the merits of your case. So, don’t overthink it, just ask.
Request for an extended repayment term
Most dollar denominated mortgages run for a 15-year term on the average, if you are half way through or even two-thirds through on your amortization schedule, you can still ask for an extension of your term per your current difficulties or unique income circumstance. Yes, you may end up paying a bit more interest due to extended term but what an extended term grants you is that, it allows for your monthly repayment figure or amount to reduce to a bearable figure so you can breathe, while you find a more sustainable solution which may include paying off earlier should you come into a big fortune or bonus further down the years.
Convert to a cedi mortgage over a longer term
This one is a bit dicey but still very much another viable comfort measure to offer relief. You can request for a conversion of your dollar mortgage into a cedi or local denominated currency for temporary relief. Key word here is temporary because you have to note that though converting to local currency mortgage will provide relief from the burden of buying dollars at rising rates, the conversion would still be pegged at the prevailing rates and may mean you taking the mortgage all over again at a higher interest rate for locally denominated mortgages. So, see this measure as a temporary one and aim to pay off as quickly as possible.
Move out and rent the property
Another measure which maybe a bit hard to navigate due to sentiments attached, is to move out of your current abode (especially if it is very big house). Renting out the property and using the proceeds to support your mortgage repayments may also accommodate renting a smaller unit that you can comfortably afford to pay for. Once the storm passes and your income circumstance changes, you can always move back into your self-owned property.
Simply sell the house
Simple I say? Well, not that simple but there comes a time when you need to bite that bullet and it may involve selling a property that holds years of memories. The key issue here is to control the proceeds of what could perhaps be an imminent sale should you not be able to service your mortgage. Your lender can apply for a right of sale, sell at a compromised price to quickly retrieve their funds and leave you a pittance, so ‘kill’ that emotion and get ahead of the lender and negotiate a good sale. Do inform your lender about your intention to sell though, as this process could take months to find a buyer and completion of paper work.
These are a few summarized relief measures available to provide relief in these turbulent times, should you need some hand holding or professional advice to undertake these processes, don’t hesitate to reach out to us per contacts below. Let’s do this!
The writer is the Executive director of Yecham Property Consult
& Founder of Ghana Green Building Summit.
Linkedin: Cyril Nii Ayitey Tetteh