The quick change in our economic landscape should give many homeowners a reason to evaluate their mortgage situation.
As a respected agency in your area, we have experienced this scenario before and understand how tightening economic conditions and rising mortgage payments affect our clients.
Below, we’ve offered a short list of basic advice on how you might evaluate your current position in terms of mortgage debt.
Despite negative media commentary, local prices are holding up well. Industry researcher CoreLogic recently studied 106,000 sales nationally and found just a 0.3% increase in those that sold for a loss. Some 93.7% are still selling profitably, and the median average gain is almost $300,000.
If you’re thinking of selling or buying, our agents will be more than happy to discuss price trends in the area. It’s important to understand that while media reports are a broad sweep of the market, the only value trends that matter are those in your area.
If you sold or bought recently, we appreciate managing your mortgage may be a priority right now. So, we hope our quick list of advice is helpful to you.
Approach your lender
Don’t wait until you’re at your wit’s end to do this. Lenders appreciate proactive clients. They will give you several options to help ease any fiscal pain or tell you where you stand.
Talk to a broker
Brokers offer their services for free, and they will give you a wide range of options with alternative lenders eager to win your business.
Ask about an offset account
This arrangement is available with variable home loans. The money in this account works to reduce the interest you pay. Most people put their monthly earnings through their offset account. Your lender or broker will step you through this option.
Fix your rate
The earlier you can do this, the better. However, lenders are shying away from this strategy because they know rates are heading north. Also, be aware that certain conditions may lock you into the lender when you fix your rate. Seek advice before proceeding.
Pay fortnightly
You’ll gain an advantage by paying your mortgage every fortnight instead of monthly. Do this, and you’ll pay the equivalent of an extra month’s mortgage and not notice. The saving on interest mounts up over time.
Reschedule the loan
If you’ve been paying your mortgage for several years and tough times start to bite, ask your lender about rescheduling the loan. The outstanding debt is re-calculated over 25 or 30 years to reduce your monthly payments. You can always increase the payments at a later date. Be aware that you’ll pay more interest over the life of the loan. So, again, seek professional advice before proceeding.
NOTE: The information in this article is general in nature and provided as a general overview only. Always consult your financial advisor or accountant for advice specific to your personal circumstances.