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Mortgage Stress: Our top tips to guide you through

As the cost of living continues to rise and interest rates remain high, the effects of financial stress on Australian families are becoming more evident. With mortgagee in possession figures now at levels similar to those during the Global Financial Crisis, it is clear that many Australians are struggling to keep up with their mortgage payments. In this article we will explore how you can manage your mortgage stress and provide ways to help vendors get back on track.

1. Understand Your Mortgage: It’s important to understand your mortgage payments and terms. Understanding the loan structure, repayment amount and payment schedule can help you plan your finances better. You should also be aware of the impact that interest rate increases and fluctuations have on your mortgage payments. Knowing these details can help you identify potential problems ahead of time and make decisions about paying off your mortgage faster or changing repayment plans to reduce stress.

2. Budgeting: One of the best ways to manage mortgage stress is through budgeting. Take a look at your income and expenses, taking into account all variable costs such as groceries, utilities, fuel etc., as well as fixed costs such as rent.

3. Call your lender. This may be difficult to believe but your lender will only take possession of your property as a last resort. They would much prefer to receive your repayments each month, including interest which adds to the banks profitability. As soon as you begin to experience financial hardship, your lenders hardship team can try to assist you in maintaining your payments. This is the best time to make contact. If you have a previously good repayment history, you may be eligible for a wider choice of options.

4. Consider Refinancing: Refinancing your mortgage can help with reducing mortgage stress however, before making this decision it is important to consider the implications as any associated fees that may be involved with refinancing. Remember to shop around for a good deal and read all paperwork carefully before signing.

5. Get Professional Advice: If you're having difficulty managing your mortgage, it's important to seek professional advice from a financial advisor or financial counsellor. They will be able to recommend ways to manage your finances better.

6. Superannuation release. If you have been issued with a default notice from your lender that they plan to proceed with enforcement action, you may be eligible to apply the the ATO for early release of your superannuation to help you to retain your primary residence. This option should be used as a last resort.

You can find more information about eligibility, evidence required and how to apply for early access on compassionate grounds on the ATO website.

For some families, selling may be the only option. When working with both lenders and borrowers in this space, being proactive in your approach is key. When you start to feel the stress of increased debt, it is time to ask for help. Selling your family home in order to free yourself from stress should not be viewed as a failure, but as an opportunity to start again.

At Scout Corp, we understand the complex nature of mortgage stress, and can provide experienced and professional assistance in helping you make the right decisions for your future. Contact us today to see how we can help you.


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