Re Financing

A missed payment is a payment that you completely missed and never made up.
A late payment is one that you did not pay on time but did eventually make up the repayment. Therefore, you should always make sure that you pay your repayments on time and be completely aware of the monthly payment date especially if the repayments are by direct debit.

As mentioned before the major banks and other prime lenders will not approve your loan if they can see any arrears. They do not lend to people who have missed payments on their current home loan, in particular during the previous 6 to 12 months – they are very strict in this regard. However, there are specialist and non-conforming lenders who can help you. They assess your loan based on how long it took you to make up your missed payments and if you can handle your current commitments or if you are overcommitted. We can find you the best lender to get
your loan approved!

If you want to refinance your current home loan, you need a specialist mortgage broker to find you a lender who can consider your situation, especially people that are close to having their home repossessed. However, if you can’t make the repayments on your home then it is better to sell your home rather than refinance and just end up in the same situation again. You can speak to our specialist mortgage brokers who will guide you in the right direction.

The lender will charge you default or penalty interest rate if you are behind with your payments. This is normally charged on the overdue amount, however, in some cases, this will be charged on the entire loan amount. This is why you must make your repayments on time – you will avoid the risk of being charged any defaults on your loan.

The banks take action when there have been constant arrears on your home loan.
High LVR over 80% – generally 2 missed payments
Low LVR under 80% – generally 3 or more missed payments. However, for this situation, the banks will tend to work with you rather than possess your home.
However, some lenders tend to take action faster than others depending on their hardship policy.
It is important to talk to your lender and work with them rather than hide and to look for an exit strategy such as selling your home or refinancing and consolidating your debts.

Our financial institutions of today change their tune and welcoming smiles that we see on their faces when the customer’s life circumstances change for the worse. The banks will have no hesitation in taking action if the borrower is in breach of their contract, which is generally when they have a mortgage in arrears.

As you wait, the time will accumulate more bank fees, lawyer fees, and real estate fees, eating into the equity that you have in your home. Most of the time a new home loan or debt consolidation can be approved with the right lender; you just need an expert to find that right lender!