Shop around
Lenders always need to win new customers, even in tougher times. Do not discount the fact other institutions will want to win your business. Good deals are often available to those prepared to swap lenders.
Simple changes
Assess your spending habits. Making cutbacks that won’t destroy your lifestyle may ease the pain. Even simple changes, such as taking your lunch to work instead of spending $15 a day (that’s $75 a week!), can make a difference.
Change payments
If you’ve been paying your loan faster than required, you’ll have built up some equity. You may be able to use this credit to reschedule your arrangement and immediately reduce payments.
More time
Extend your loan term, regardless of whether you have equity locked in. Repayments will fall, but be aware you’ll pay additional interest charges over the loan term. Think carefully before stretching your mortgage back to 25 or 30 years.
Ask for help
In a dire situation, always talk directly to your lender or broker. Describe your situation and allow them to help you. Their priority will be to keep your business. Possible options in this situation include pausing payments.If you are a homeowner experiencing a stressed budget – you are not alone.
While property remains a great medium to long-term investment, the issue for many owners right now is very much short-term.
There are a number of tactics you can take that may help you face mortgage stress, but you should always talk to your lender, mortgage broker/advisor or a financial advisor.
Competition
Compare your mortgage with competing offers. Rates vary substantially between lenders, but so do their terms and conditions. Be diligent in assessing alternative loans, or talk to your broker.
Have a chat
Ask your lender for a better deal. Some owners have gained discounts simply by picking up the phone. It’s worth a try and may ease your situation.
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.