21 Apr 2020

Its fair to say the world has been turned upside down – quite literally. The banking and finance sector has not been immune to changes in terms of both their policies and how they service your loan. It is not all doom and gloom, however. There are a number key points our mortgage brokers would like you to know about what to realistically expect when it comes to your home loan moving forward.

The Good Stuff

Depending on your circumstance, its not all negative when it comes to mortgages and finance in this current climate. The following are the top tips our mortgage brokers want you to remember:

  • Generally speaking, it is business as usual for lenders.  If you are still receiving an income, they will still consider an application for a purchase of a property or refinance of a current home loan
  • A number of lenders are still giving quite generous refinance rebates in order to pick up new refinance business. It is key to note that these rebates more than offset the cost of moving lenders. As they will not be available indefinitely, we do recommend seizing the opportunity as soon as possible to avail yourself of the benefits if you are able to.
  • Interest rates are low and if you have not had your loan product and interest rate reviewed recently you are potentially missing out on some incredible savings. Even if a full refinance to a new lender is not an option, renegotiating your current rate to a cheaper one or switching products to something more competitive is often a viable solution.
  • If your income has been impacted due to the current pandemic, banks want to work with you, with most offering up to six months in deferred repayments to ensure customers can remain in their homes and ride the storm.

The Stuff to Be Aware Of

  • When opting to take advantage of the repayment deferral policy, be mindful that it is not a “holiday” from making repayments as such as the interest will continue to accrue, with your loan balance being higher upon completion of the deferral period. Depending on what your current loan balance is, this could mean a significant increase in your overall debt position.
  • A fixed rate loan is a joint commitment by the client and the lender as to the amount of interest that would be repaid over an agreed period of time so when choosing to break that fixed term a break cost is likely to be charged. Banks won’t waive your break fee if you are fixed unless by extreme exceptions for individual financial hardship cases due to lack of job or serious lack of income. Even this, however, is done on a case by case basis to be discussed directly with the bank’s hardship team should you qualify, which is not a given.
  • Like many industries, the financial services sector has been impacted in the way in which they can service their clients. Whilst lenders are certainly open for business, processing timelines are delayed in many instances, far longer than under regular circumstances. Whilst every effort is made for applications to be assessed and settled as efficiently as possible there are delays in some cases that may need to be endured.
  • If you are seeking assistance with your home loan due to financial hardship we urge you to contact your lender direct to negotiate an agreeable and realistic solution. Your financial institution will be your point of contact with a view to altering your lending terms.

We are living in unprecedented times but that does not mean to say there are not ways to ease the financial burden of your home loan. Your mortgage broker will be able to guide you though the options available and point you in the right direction should you require further assistance. Contact the team for more information or to review your current position and start saving.

 

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