Financial tips from our mortgage broker amid the Coronavirus crisis
If you are finding yourself in a finance maze due to the pandemic, reaching out to a mortgage broker and letting them guide you through it could be the best possible solution. Our team work closely with Smartmove Mortgage Brokers to help find you the right loan which suits your specific requirements.
“We have access to many lenders and solutions that assist us in helping our customers navigate their way through this difficult and confusing time. We work hard to find the best possible solution for customers in a variety of circumstances either with their current lender or an alternate lender.” says Lionel Singh, Mortgage and Finance Advisor. ‘We are here to help you understand what options are available for you and guide you through those options. This may be as simply directing you to the correct link to register for a repayment pause, as opposed to sitting on hold with the bank for hours.”
Here's a summary of what Mortgage and Finance Advisor, Lionel Singh, recommend to anyone who has had their financial circumstances changed due to the uncertainty.
• It is advisable to keep the loan repayments up for as long as possible as there are options available which might include switching to the minimum required payment, refinancing to interest-only repayments or consolidating debts to reduce overall repayments. But if this option doesn’t work and if a relief package is necessary, there are strategies that could be implemented to ensure you are in the best possible situation once the repayment pause has ended.
• Asking the lender for a better rate would be another option and if they’re not ready to help with it, switching to a different lender could be the solution. Other lenders may be offering incentives to refinance with them by receiving ‘cash back’ with offers ranging from $2,000 to $4,000. Lenders offerings change frequently and what was competitive 6 months ago could now be out of date. Regular review is always recommended.
• The one area where interest rates have dropped the most is in fixed rates. 1, 2 & 3 year fixed rates have almost across the board dropped significantly, to a position well below available variable rates. These fixed rates are so low they now warrant serious consideration as the potential saving (if variable rates remain at the current level) could be significant. In the right circumstances fixing not only could saving you interest but provided greater certainty around your monthly repayments. Instead of deferring any repayments, you can save on interest by refinancing to a fixed rate if you currently have a variable rate and if the fixed rate is lower than what you are paying now.
• If you are already locked into a fixed rate, it is best to stick with the loan arrangement as lenders are not offering to waive the break costs on existing fixed rate loans. It is best to speak to a broker about fixing a rate and analyse the pros and cons.
• Lenders are changing their lending policy and are taking a more conservative approach to comply with responsible lending. While it is challenging to get finance for someone who has lost their main source of income, there are options available for those with stable employment. If your household income has reduced from two to one, there may still be lenders willing to provide finance.
With their ease of access to various lending panel, Smartmove will be able to work out a solution based on your circumstance and help you through it while getting some good deals.
Start by talking to Lionel Singh at Smartmove to help navigate through your options. Lionel can be reached on 0413 473 930.