For most Australians, a mortgage is the biggest financial commitment they will make in their lives; and for many of them, the financial pressure to make the monthly repayments can take its toll. If you are unprepared for the burden a mortgage can have on your personal finances, you may find yourself suffering from ‘mortgage stress’.
When a borrower has more than 30 per cent of their total income going to their home loan repayments, they are considered to be suffering from ‘mortgage stress’. Obviously if one third of your income is going to the house, it leaves very little cash to put away for financial emergencies and other incidentals.
In uncertain times like these, it is important to put processes in place to ensure you always meet your mortgage repayments.
That said, even the best laid plans can fail. If you do find yourself in undue mortgage stress, there are a few things you can do to help your situation.
Speak To Your Lender
If you are struggling to meet your mortgage repayments, the first thing you must do is pick up the phone and speak with your lender. Your lender is not your enemy and they can offer you plenty of solutions, such as refinancing the loan or working with you to make the repayments. The truth is, your lender does not want to take your house and they make much more money from your repayments, so it is in their best interest to work with you to find a solution.
Talk to the Financial Ombudsmen
If the situation becomes dire, the option is always to call the Financial Ombudsmen on 1300 780 808. They provide an independent service to resolve matters between consumers and financial service providers. They cover all financial issues, such as credit, loans, insurance, financial planning, investments and estate management.
Switch lenders
If your lender still won’t play ball, then it may be time to make the switch. Get in touch with a mortgage broker, such as Mortgage Choice. Their services are free and they can give you a list of the best home loans for your circumstances.
Maintain a Budget
Nobody likes to budget. It’s tedious and can be complicated at times. However, taking a good look at your finances will help you plug some of the leaks that are draining your expenses. Create a record of your expenditure and compare it to your income. Be honest with your spending and look for ways you can cut back. It may be something as simple as cutting back on the daily coffee at the local café or as big as selling your car. If you don’t give your finances a proper checkup, you may find them getting sick very quickly.
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