What do you do when your Mortgage Debt Climbs to high that you can no longer meet repayments?
In our experience as Trusted Property Repossession Advocates there are several options to consider if you believe you might be able to get your mortgage repayments back on track.
When you are experiencing mortgage stress, there are three main things you must do:
- Communicate with your bank or lender
- Keep making repayments to your home loan (of an amount you can afford); and
- Negotiate an affordable and realistic repayment arrangement with your bank or lender.
Meanwhile, the following ideas and tips may help, if you are about to miss a mortgage payment (or have just missed a payment) for the first time:
1. Examine your expenditures, complete a budget, and cut down on all unnecessary and/or non-essential expenses immediately. We’ll cover this in more detail in “Step 1: Determine Your Financial Position.”
2. Rent out your home and live somewhere else (ideally, somewhere rent-free or with a reduced payment) until you can manage your repayments again.
3. Take in a boarder and/or rent out a room or two in your home.
4. Ask friends or relatives for a loan (but remember, “Loan” means they’ll expect to be paid back!).
5. Sell some of your non-essential possessions.
6. Refinance your home loan (only if you can get a lower interest rate and you can afford the new repayments).
7. Modify your loan to an interest-only loan for a fixed period (this will reduce your repayments for a period of time).
8. Ask your lender to extend the duration of the loan agreement in order to reduce your repayments.
9. Apply for a repayment arrangement on other debts while you catch up on your mortgage. (It is easier to freeze/lower interest and/or temporarily suspend repayments for some months on smaller debts like credit cards and personal loans.)
Important: Do not simply ignore your other debts! You can eventually lose your house because of unsecured debts like credit cards and personal loans – it just takes a bit longer.
10. Work with your bank to see if you can consolidate your other, smaller, high-interest debts like credit cards and personal loans into your lower-interest home loan, therefore consolidating and reducing overall debt payments.
11. Raise funds to pay monies, which are due and/or overdue.
The bottom line is that you must sort out a repayment arrangement with your bank or lender based on your income. None of the above options are guaranteed to work; however, one of them just might be the solution you need to get your repayments back on track.
If you are falling behind on your Mortgage Repayments – and you don’t know what to do next call Property Solutions for Australia on and we can help you analyze the best options for you – BEFORE it’s too late!
Alternatively you can CLICK HERE and get instant access to a FREE report on the “7 actions you can take immediately when you can’t pay your mortgage!”