Mortgage stress solution #1: Refinancing
Refinancing can be a great way to avoid mortgage stress. If your current home loan is no longer in line with your needs and goals due to a change in your situation, it may be worth looking at refinancing your existing mortgage, as an option to determine if you are still receiving the loan that meets your requirements.
Refinancing is the replacement of an existing mortgage with another, this can be with a new or your existing lender. Refinancing can help reduce mortgage stress in a number of ways.
Most homeowners choose to refinance their mortgage in order to lower repayments and save money. If you’re experiencing financial stress and your home loan has not been reviewed recently there may be an opportunity for you to save on your repayments by refinancing to a lower rate. It is of course important to understand the potential costs involved with refinancing and ensure that a more competitive rate will result in savings for you.
If you are experiencing mortgage stress due to multiple different bills and debts to pay off, you could benefit from refinancing your home loan to consolidate debt. As your home loan is likely to have the lowest interest rate of other debts, by folding multiple high interest debts into one you may be able to reduce your overall monthly expenses.
Mortgage stress solution #2: Mortgage deferral
If you have had a sudden change in your situation that has caused you to fall into mortgage stress, such as reduction or loss of income, you may be able to get assistance from your lender on your mortgage repayments.
If you are struggling with maintaining your current repayments, some of our lenders may be able to offer you a repayment holiday for a period of time. A repayment holiday involves pausing your monthly repayments for an agreed upon amount of time.
By deferring repayments, you’ll be given the opportunity to ease your mortgage stress by seeing a reduction in your total expenses. This allows you to focus on your situation with confidence that your home loan is not falling behind.
It is important to keep in mind that interest will continue to accrue during a repayment holiday and therefore while being useful to relieve your financial stress it is not a long term solution for serious financial woes.
Mortgage stress solution #3: Talk to a broker
We understand that everyone’s situation is different and some of these options may not be viable to you in avoiding mortgage stress. As there is an increasing trend of households falling into financial stress due, it is important to do your own research and get expert advice.
If you’re feeling overwhelmed or concerned with your current mortgage repayments and believe that you are in mortgage stress, having an expert on your side can be the difference. So contact your local Mortgage Choice broker today to get expert advice on your situation and understand what options are available to you during these tough times.