Tim Cece | Director, Search Mortgages
As we get closer to the all expensive festive season, household finances will be placed under the spotlight and the pressure of maintaining regular mortgage repayments may become overwhelming.
You’re not alone in this. Whether the time of year, a change in your circumstances or (perhaps in the future) rising interest rates put you in the position that you may miss a mortgage repayment – there are some alternatives available that will help alleviate your personal and financial stress.
Be proactive before it gets worse
If you’re about to miss a mortgage payment or already have, be proactive and get help before it gets worse. And you’ll be glad to know there is help available. Taking the bold step of raising the issue with your lender is the best thing you can do – in fact, the earlier you do that, the more options your lender will have to assist you.
A two-way relationship
Remember it is in the lenders best interest to help you maintain your mortgage. One option is to give your lender a hardship notice. It looks like this:
First, you contact your lender to explain the situation, which may require a person-to-person meeting at their office.
Before the meeting, consider what options are available and define a ‘plan of attack’. This will show the lender that you’re proactively searching for an answer. After all, people are more likely to want to help you if they can see you’re trying to help yourself.
Whatever plan you decide on, you can give your lender a hardship notice orally or in writing that you are unable to meet your obligations – your lender can guide you in this.
Your lender has 21 days from receiving your hardship notice to ask you for any further information it requires. If it does not require further information, it has 21 days from receiving your hardship notice to decide whether or not it will agree to change your loan.
Depending on your situation, the lender may come back with a scenario to ease payments for the short term, increasing them later. This may escalate your overall loan costs, but you will maintain your home and mortgage, and will be better off in the long run.
You’re not on your own – every month there are home owners having issues with making payments, and just as there are legal rights for home buyers, there are also legal services for mortgage holders.
Perhaps there are also other financial issues, or bills, that also need attention, in which case free advice is available from the Financial Counseling hotline on 1800 007 007.
You might feel somewhat embarrassed but feel free to talk with your Search Mortgages broker about your loan issues. We have helped others and can call on our experiences to, suggest a plan, and work with you to minimise worries and achieve a resolution.
Visit Moneysmart.gov.au, another great resource for tips to help you keep up with your mortgage repayments.