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Managing Mortgage Stress

You’ve got your mortgage, awesome! But the work isn't over; it's crucial not to adopt a "set and forget" mentality when it comes to your home loan.

Proper mortgage management is essential to ensure your mortgage continues to serve your best interests and this is where a mortgage advisor can help you manage this over time.

Managing your mortgage can save you both time and money on your home loan and help you navigate mortgage-related stress when life throws unexpected challenges your way. This type of stress is a concern that can impact anyone, regardless of their location or property value. While interest rates can contribute to this stress, the root causes often stem from unforeseen life events such as unemployment, illness, injury, or relationship breakdowns. Let’s take a look a a few key strategies to efficiently manage your mortgage and expedite your loan repayments.

The most effective approach to managing mortgage stress is to proactively implement strategies to prevent it. We like to consider the two “B’s” - budgeting and buffers.

Create a Comprehensive Budget: Start by developing a well-structured budget based on your current financial circumstances and objectives. Distinguish between necessities, desires, and unnecessary expenses, but remember to allocate some budget for leisure activities as well. Utilise a budget planner tool to gain control over your finances - many banks have budgeting apps or you can find lots online for free.

Build a Financial Buffer: Consider establishing a financial buffer within your home loan by making additional repayments whenever feasible. This will provide you with some breathing room in case you encounter temporary financial difficulties. You can achieve this by making extra repayments or saving additional funds in an offset account. Just make sure that your loan allows for extra repayments without penalties - otherwise you could end up costing yourself!

Additionally, think about acquiring life insurance, income protection insurance, or mortgage protection insurance when obtaining a home loan to safeguard yourself in the event of illness, injury, or unforeseen circumstances. Our Insurance Advisor, Samrita, can help with this.

If you ever find yourself in a situation of mortgage stress or anticipate trouble in meeting your home loan repayments, don't hesitate to reach out to us as soon as possible. We can work with you to find the best option to help alleviate any stress or pressure you might be experiencing.

Here are some available options that we can always look at.

Debt Consolidation: Consider consolidating your debts, including personal and car loans, credit card balances, and store card balances, into your home loan. This approach secures your debts with your property and can simplify your financial obligations.

Refinancing: Explore the possibility of refinancing your home loan, which has become popular due to fluctuating interest rates. Refinancing can be advantageous in reducing costs if done under the right circumstances. However, it may involve certain fees, so it’s important to weigh up if it is worth it. It's essential to conduct a thorough cost-benefit analysis before making a decision.

Home Loan Variation: Apply for a hardship variation to extend your loan term, swap to interest only repayments, or take a repayment holiday. Most lenders offer these options.

As always, we recommend speaking with a mortgage advisor to ensure you are getting the right advice based on your personal circumstances. With an ever changing market, and plenty of options available, we will work with you to find an option that suits you best - both now and in the future.

Contact Better Choice Home Loans today, your local mortgage advisors.



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