Your mortgage FAQ answered:
1. I'm out of work, and need help right now!
Watch this space! The government has announced an agreement with banks to offer 6-months mortgage holidays and short term business loans where incomes have been affected by Covid-19. Banks will be releasing details by the end of the week including eligibility criteria and application processes.
The main thing to remember is not to leave it too late: contact the bank before they contact you. Please reach out to me if you are concerned. I'm more than happy to be a sounding board for you, as you navigate your options.
2. I'm okay for now, but I'd like to create a buffer.
Your income may be just fine at the moment, but you could be a bit concerned that tough times are ahead. If this sounds like you, options include reducing to minimum repayments, interest-only payments, or applying for a 'buffer': a line of credit.
If we get in early enough, we may be able to open a ‘buffer’ against your mortgage. A line of credit is an approved credit limit, secured against the equity in your property. While they can come with higher interest rates than mortgages, they’re typically lower than credit cards; plus can have quite flexible repayment options. I can often help you with these queries, whether explaining your options fully to you, or negotiating with the bank. Lines of credit can be tricky to get approved, so please contact me as soon as possible to find out if this is an option for you.
3. How can I get those low rates?
You may have noticed that some rates have dropped. ANZ has led the way with this, and the market is still responding. They may not go much lower, but it is worth keeping an eye on this.
It's worth noting that break fees have increased in tandem with the rate drop. If you're more than six months from your refix date, then break fees will likely wipe out any benefit of moving to a new rate. There's no need for stress however, as the Reserve Bank have said they won't increase the cash rate for at least 12 months. This means that these rates should be around for a while yet.
4. Are banks still lending? I see an opportunity and want to borrow...
Yes, they are! While some people are battening down the hatches when it comes to real estate in the current climate, others are spotting opportunities and want to investigate. The application process for new lending or a restructure can often be done remotely. Drop me a line or give me a call, and we can go through the process together.