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There are several other solutions to consider when you are behind on your home loan repayments. However, you may not be able to capitalise you mortgage arrears with a refinance because of government or lender policies. As a result, see the list of alternative mortgage arrears solutions available to you below:
Each lender has home loan hardship policies to help bad financial situations for all consumer loans. As a result, asking for hardship to assist with your arrears may be possible. However, there are many different mortgage hardship structures for your financial problems:
- Firstly, increasing your home loan payments.
- Secondly, pausing your mortgage repayments altogether and making up your repayments with a lump sum.
- Thirdly, stopping your repayments for some time; then making higher than the standard repayments.
- Also, adding your home loan arrears to the end of the loan term; meaning you don’t have to pay the arrears today.
- Finally, allowing for no payments until you sell your home.
It is vital to understand the hardship you are asking for; and also what is approved. Consequently, a wrong hardship agreement could result in prolonging a property sale, or a home loan refinance. However, you may also apply for a hardship variation.
Secondly, payment plans are usually part of a hardship plan. As a result, a hardship arrangement should allow you to pay your mortgage arrears over an extended time. However, the collection process can recommence if you miss a payment or falter on your hardship requirements.
Mortgage Payment Insurance
Have you got a mortgage payment insurance policy on your home loan? Importantly, mortgage payment insurance protects your home loan payments. As a result, the insurer may pay your mortgage payment while you are having trouble. Certainly, mortgage payment insurance is not “lenders mortgage insurance (LMI)” which only protects the lender in the event of your default.
Are you having trouble obtaining a payment plan? Otherwise, have you been rejected for hardship? As a result, an AFCA complaint may help with your hardship request. However, once your lender has obtained eviction orders (legal/court action), an ombudsman complaint will be rejected by AFCA.
Release of Superannuation
You may release your superannuation payments to bring your mortgage arrears up to date. However, this is only available for owner-occupied properties. Also, the release of superannuation must stop the lenders’ eviction process and pay back the entire home loan arrears.
As a result, you need to have sufficient superannuation. Consequently, the superannuation release will need to pay your arrears and the super tax fully. Otherwise, the eviction process will continue.
Financial counsellors can help when you have financial difficulties. Indeed, a financial counsellor can help negotiate:
- Repayment arrangements to repay the arrears debt.
- Certainly, hardship applications with your lender.
- Also, a release of superannuation to clear the arrears.
- Plus connecting you to other government services that may assist.
- In some circumstances, investigate and negotiate with insurance companies.
We highly recommend talking to a specialist mortgage advisor about your loan options. Hence, tighter lending standards means greater difficulty in obtaining approvals; even if you have a good credit rating. Call Loan Saver Network on 1300 796 850 to discuss your options. Therefore, you may qualify for a mortgage refinance, financial hardship or one of the other solutions noted above.