Message To Stressed Homeowners: “It’s Time To Reach Out!”

Mortgage brokers The Lending Team, have emphasised homeowners are more overwhelmed than ever before. The rise in cost of living and interest rates plus recent weather damage has placed many families ‘on the edge’ financially. “Many don’t know where to turn; but they do have options…” comments Neville Modlin, a qualified mortgage adviser from The Lending Team. With more than 30 years’ experience in the finance industry, Neville Modlin says we haven’t had stress like this since the GFC in 2008.

Neville Modlin (The Lending Team - Mortgage Adviser & Director) and Keagan Modlin (The Lending Team - Managing Director)

High interest rates = high impact

80% of homeowners contacting Neville and his team are currently on 2-4% fixed term interest rates. With renewal dates approaching, they’re likely to refix at 6-7%. On a $800k mortgage, that’s an estimated extra $400 per week or $1600 a month and for many families, this is daunting.

Qualified advice is key

“What’s really concerning is the number of people who don't know advisers can help with the refixing process; many homeowners are unaware there are options available to help during this tough time.

“Household’s don't have to wait for their current term to end to kick these discussions off. Early discussions are crucial to give you time to explore all options on the table,” says Neville.

Time to reach out? Let’s explore your options

If you’re currently facing hardship or lying awake worrying about meeting your increasing repayments, there are things you can do.

• Mortgage Restructure

Your adviser will review your existing structure and explore what adjusts can be made to reduce your repayments. Key areas for discussion include:

• Floating vs Fixed Rates
• Extending your Loan Term
• Interest Only Terms
• Refinancing

Refinances are when you move your existing loan to a new provider, during which you also have the option to restructure.

At first glance, interest rates are similar between the main banks, however a ‘cash contribution’ offer is an attractive incentive to move. Most banks are offering 1% cash and some up to $25,000 - this makes a massive difference to homeowners. There are, however, potential costs to refinancing so your adviser will also take those into consideration when this is discussed.

• Speak to your bank’s hardship team

“If necessary, banks have dedicated hardship teams available to assist, and advisers help play an intermediary role for overwhelmed customers. These teams are dedicated to assessing options such as a personalised repayment plan on a case-by-case basis,” he explains.

Key advice to those worried:

“Homeowners need to have an understanding of their financial position now; not later. Many spend too long on the ‘what ifs’, however, it’s all speculation until they’ve had a mortgage adviser assess where they are. From there it's possible to come up with a workable solution,” concludes Neville.

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