If I can’t refinance can I get help with other mortgage arrears solutions?
May 14, 2020Can I refinance when I have bad credit?
May 14, 2020
Many causes contribute to a home loan arrears; as can be read in the Reserve Bank of Australia (RBA) report. As such, an arrears problem is most likely a result of reduced income. However, there is always a further underlying cause of not making regular repayments. Although some reasons are not immediately able to be seen.
Consequently, common reasons for mortgage arrears leading to eviction are:
Debt Related Issues
- Firstly, a change in the debt level, such as getting a car loan.
Income Related Issues
- Secondly, reduced income, such as having a baby and taking maternity leave. Hence, there is an upset to financial stability.
- Thirdly, income issues related to reduced economic conditions and an increase in the unemployment rate. Consequently, we see this with the Coronavirus outbreak.
- Also, the end of an employment contract can mean income stops.
Environmental or Economic Issues
- Thirdly, a decreased housing market and real estate values. As such, the mortgage arrears could relate to an economic downturn resulting in no equity and inability to consolidate debt.
- Moreover, divorce and family break up can cause a significant impact on financial stability.
Health Issues
- Finally, mental health, gambling and substance abuse issues that reduce the capacity to maintain mortgage payments.
- Then, medical reasons such as cancer, death of a family member, sickness of a child or income earner. Also, a partners health issue could result in one income loss. Whereas a child’s health issues can result in the loss of both incomes.
The Complexity of Mortgage in Arrears Issues
Quite often, the problems that have caused arrears are complex. For instance:
- Initially, starting with gambling and the associated debt issues.
- However, the debt issues, caused by gambling then result in divorce.
- Finally, divorce and other problems cause mortgage payments to fall behind.
There is a range of refinancing and hardship solutions available to assist. Importantly, if you are behind on your home loan payments, you should seek financial counselling advice. Otherwise, employ the services of a specialist mortgage broker to assist in refinancing your mortgage in arrears.