With the sudden increase in interest rates over the last 18 months, many homeowners are now finding themselves in a tight spot.
With rates doubling in the last two years, many borrowers are now coming off lower rates and are having large jumps in the amount of interest they are now paying. And sadly this is now starting to have a major effect on some borrowers, with reports coming through of an increase in mortgagee sales or Property Law Act (PLA) notices being sent. A PLA occurs when a number of loan payments have been missed, and is an official notice from a bank to precede a mortgagee sale.
This has also led to a number of homeowners refinancing with third-tier lenders in the hope of retaining their homes. This can often come at the result of much higher interest rates than a bank or second-tier lenders, and the risk of some customers ending up in “loan shark” scenarios.
The interest rate rises have also hit developers hard, with many pouring money into their developments, to now be faced with a slower market and unable to sell them and recover their costs.
So what can you do if things are getting tight or you are struggling to pay your mortgage? The best thing to do is get in touch with a trusted mortgage advisor like Better Choice Home Loans, right away. While it can be easy to put your head in the sand, acknowledging that things are becoming tight or that your circumstances have changed, allows more time to be able to come up with a solution. We work closely with banks and non-bank lenders and can speak with them and negotiate on your behalf. We also have a number of options available, depending on your personal circumstances.
It’s anyone's guess as to where the market will go from here, however it’s predicted things will likely remain where they are for the foreseeable future. This means that if you have an upcoming interest rate rollover or are concerned about making your loan repayments, get in touch and we can help you make a plan to manage this before it gets worse.
Contact our local mortgage advisors on 0800 005 676.