The coronavirus crisis has already cost many people their jobs or sliced hours off their working week.
But even if you’re one of the lucky ones who still has full employment, it’s a good idea to be prepared in case your circumstances change in this fast-moving crisis.
Here are three things you can do now to prepare you home loan in case your financial circumstances change:
1 Build up a buffer
If you can afford it, make extra payments into your mortgage to build up a buffer in case things take a turn for the worse. Any extra cash you put into the mortgage can be used for your mortgage payments if need be and can help tide you over in tough times.
You might be spending less by not going to restaurants or the cinema or on shopping trips, so you could put the extra cash into your loan.
2 Renegotiate your loan
Now is a good time to ask your lender to lower your loan interest rate.
This could pay off in two ways. Firstly, your repayments are lower and secondly, the extra money you are saving on the repayments could be put towards building a bit of a buffer for the future. We suggest you talk to a UNO expert to see how they can help you renegotiate your loan.
Refinancing your loan with another lender which is charging a lower interest rate is another effective strategy. As with renegotiating your loan, this will lower your repayments.
And now is a good time to refinance. Lenders are offering generous cashbacks of anywhere up to $4000, which can certainly make a switch worthwhile.
But if you’re thinking of refinancing, don’t wait too long as the current good deals might not last too long.
Lenders’ policies are changing quite quickly as they adjust to the coronavirus crisis. They are currently reviewing their lending policies, including the borrower’s required income level and how much they will lend against each property.
Some people are worried they won’t get access to the banks’ mortgage repayment holidays if they need it after they switch lenders. But UNO home loan broker Paul Sealey says changing banks doesn’t affect eligibility, even if someone has only been with their new lender for a week.
By following these steps, you’ll be in better financial shape to help withstand any money pressures.
And if your circumstances stay the same, as they hopefully will, you’ll still be better off.
This information in this article is general only and does not take into account your individual circumstances. It should not be relied upon to make any financial decisions. UNO can’t make a recommendation until we complete an assessment of your requirements and objectives and your financial position. Interest rates, and other product information included in this article, are subject to change at any time at the complete discretion of each lender.