Job Loss? Speak To Your Lender
If you’re dealing with job loss, you should speak to your lender immediately to discuss your home loan repayment options.
Lenders are keen to help, and hearing from affected borrowers sooner rather than later can make a significant difference.
There are Financial Hardship Guidelines set out by the Credit Ombudsman Service Limited (COSL) which lenders must now consider when dealing with affected borrowers.
Although no-one likes to talk about the grim possibility of job loss, you do have to consider and prepare for the likelihood that it could happen to you, particularly if you have the responsibility of being the sole or primary breadwinner.
The worst thing you can do is ignore the issue. Hoping the problem will fix itself, and letting the matter slide, could make it more difficult to find a successful solution. Sitting down with your lender and talking through ways to manage your mortgage repayments and stay in your home makes financial sense for both parties.
One significant benefit of being upfront with your lender is the relief from the emotional and physical stress that these situations can produce. Lenders will work with you towards a recovery time frame.
Some areas where lenders may be able to offer flexibility are postponing payments, reverting to paying interest only for the period, or refinancing the loan to an alternative product.
Once you have had the time to more fully consider the longer term financial implications of a job loss and have a realistic view on how long you may be out of work, there are several other alternatives that families and individuals may consider, including:
restructuring your finances to make repayments more manageable
reducing the size of your mortgage by downsizing or relocating to a more affordable area
encouraging another family member to enter the workforce, if this is an option
In particular, don’t underestimate the value of restructuring your finances to reduce monthly commitments and improve your cash flow. This step alone can sometimes be enough to take the heat out of the situation, so you can concentrate on taking the necessary steps towards a brighter future.
To find out more about your home loan options, call resi on 136 126.
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