There are many Australians with mortgages that fail to arrange for contingencies in case of interest rate increases or changes in their financial situation, both of which can hinder the ability to fulfil their mortgage duties.
There are many ways to avoid mortgage stress, including knowing your true financial circumstance, making extra payments, opening an offset account, or fixing interest.
Income information and estimated expenses are used by lenders and mortgage brokers to make sure applicants can pay the loan their applying for. However, knowing your own financial position is vital in case there are changes, and some mortgage brokers provide their clients a family budget spreadsheet that they can use to understand their current financial position and allow them to better manage the future.
When there is trouble, you can relieve stress through changes in the loan or lifestyle with the help of a budget. Especially important at this time of year as all those credit card bills from Christmas are beginning to come in.
Another way to avoid mortgage stress is by making extra repayments. It will move you ahead of regular repayments and reduce your interest as well.
There are also the offset accounts, though they can be quite accessible at times.
There are some lenders that allow clients to take a repayment holiday if the situation is ideal, like a new baby or major illness. However, even this is on a case by case basis.
A fixed rate is another way to ensure repayments, especially with interest rates at record lows at the moment.
Best advise is to get educated about your own circumstances and use the services of a professional to help you!