The unprecedented health crisis caused by the Coronavirus pandemic is unravelling a financial catastrophe unforeseen in our lifetime
Households across Australia have been greatly impacted and as of today tens of thousands are now unemployed.
So far the Big four have said they are allowing your mortgage repayments to be paused.
All we have to say right now, is… be cautious. It’s a not the repayment ‘holiday’ like they have made out.
Yes….It’s good news that we’ll be able to keep our homes, however the long term picture is not so rosy
Many Australians are stressing about their own personal financial security and our biggest assets are our homes.
If any of you are considering taking up the Banks no repayments for 6 months due to current economic climate….know the facts first.
At this stage we are unsure of the qualifying criteria to be eligible for each lender.
Firstly you’ll be asked to use all your redraw then you’ll get three months of your home loan repayments deferred, and after three months if you’re still facing hardship, and you ask for an extension, it may granted for another 3 months.
The cold hard facts are…. the interest will continue to capitalise monthly and at the end of 6 months you will have a compounded debt, that you will have to repay, over the same loan term you initially applied for. This means your repayments will need to increase after your holiday
Lets fast forward in six months and you have now returned to your old job, or found a new one. You then face the prospect of having no home loan buffer whatsoever and an even bigger loan to pay off, with increased repayments
You may have racked up some credit cards and after-pays to keep you afloat over the previous 6 months.
These repayment holidays can be a short term financial catastrophe, and it also runs the risk of a lot of putting a lot of households in the shit, aka financial hardship.
It all seems far removed from a home loan holiday in the sun drinking pinas. All the fine details have not been clearly communicated yet by ABA or Banks/lenders, and in my opinion this concept is confusing and potentially misleading.
We understand that for some of you there may no alternatives at this stage, however please feel free to talk to us and obtain clarification before you take up this offer. We are set up to work remotely and assist with your financial well-being, without compromising on your health and safety.
Don’t forget to wash your hands and limit social contact …Its time to get REAL SERIOUS
Nectar Home Loans Hunter
4040 0910
ben.eick@nectarmortgages.com.au
NOTE: We’re waiving our Fee for Service for all new and existing clients to assist with these hard times.
Nectar Home Loans Hunter COVID-19 Relief. Supporting our community