If you’re struggling to cover your mortgage repayments and other living expenses, you’re not alone.
Data by Roy Morgan revealed that more Australian homeowners were “at risk” of mortgage stress over the three months to January than ever before. If you’re wondering how you’ll afford your next mortgage repayment, here are some tips for getting on top of your finances.
1) Reassess your budget
Many households are already stretched thin at the moment but there’s no better time to see where you can cut even more expenses.
Can you do without the gym membership? Maybe you don’t need five subscriptions to different streaming platforms?
Start cutting costs and saving a buffer for your mortgage repayments.
2) Shop around
Ten minutes of your time spent making a few phone calls to your utility and service, or health insurance providers to see if you can get a better deal could save you money in the long run.
Go through your expenses and try to negotiate a more competitive rate. Be sure to see what competitors are offering too.
3) Boost your income
Realistically, there is only so much you can save. Another way to boost your savings is to establish an additional income stream. Think about starting a side job, renting out assets, or selling some of the unused items sitting around the house.
If you’re feeling game and you think you deserve it, perhaps you could ask your boss for a pay rise. You never know your luck!
4) Get us to review your interest rate
Don’t assume your current loan is the be all and end all. There are loads of different lenders with different home loans out there. Speak to us to explore all of your options.
We may be able to negotiate a more competitive interest rate with your current lender or point you in the direction of another bank with a loan that’s more suitable for your needs.
5) Reach out to your lender
If you are struggling, it’s best to contact your lender sooner rather than later. Let them know where you’re at.
Your lender may be able to waive fees, discount your interest rate or restructure your repayments to support you in managing your loan. If you have an offset account or redraw facility, you may be able to use those funds for your repayments.
What happens if you default?
If you’ve already fallen behind in mortgage repayments, your bank may give you a grace period of a couple of weeks to catch up. However, if you don’t make the repayment, you will have defaulted on your mortgage.
At that point, you may be stung with fees and your mortgage default may be recorded on your credit rating. This could impact your ability to borrow money in the future.
You may be issued with a default notice to pay the lender within a certain timeframe. If this doesn’t happen, the lender may repossess the property and sell it to recoup the debt.
The bottom line is: try to stay on top of your mortgage repayments and avoid defaulting if possible.
We’re here to help
We hope you’ve found these tips helpful. If you’re feeling stressed with making your mortgage repayments, get in touch today to chat through your home loan options.
