Can’t pay mortgage – What are the options?

Is your mortgage in arrears? Are you falling behind on repayments? Learn options for dealing with home loan problems or not being able to make your mortgage repayments in New Zealand.

Reasons why someone may fall behind on their mortgage repayments or have mortgage difficulties

Reasons for falling behind on mortgage repayments and experience mortgage difficulty
Credit: www.mortgagerescue.co.nz

Are you unable to afford your mortgage?

Did you have some change in circumstance compared to when you first got your home loan? Here are reasons why you may not be able to pay your mortgage:

  • Loss of a job or employment
  • Taken time off work, e.g. due to sickness, illness, injury, COVID-19, personal reasons
  • Being made redundant
  • Interest rates have increased – meaning your home loan repayments are too expensive
  • Increase in family size, such as having kids, which may have made your living situation more expensive
  • Financial problems, business problems, or other financial difficulties

New Zealanders have faced huge pressures with the rise of interest rates in previous times. They have seen their home loans become more expensive.

 

Consider talking to your bank or lender

A phone call or email to your bank can be a starting point. Your bank or lender may have options. These options can include ways for them to find ways to help you with not being able to pay your mortgage.

Here are ways the bank or lender may help:

Interest only

Sometimes, the bank or lender may agree to change your home loan to ‘interest only’ temporarily. This means a lower repayment, because instead of paying the full repayment which comprises of both principal and interest, you are just paying the interest only component.

Usually, this is a temporary measure and can provide you relief from expensive home loan payments.

Extending the loan term

The bank or lender may agree to extend your loan term and restructure your home loan. For example, if you currently have 20 years to repay your home loan remaining, they may offer to extend this to 25-30 years. This would lower your repayments. However you may want to keep in mind this means a potentially greater interest cost long term.

Keep good records

It’s helpful to keep good records of the emails exchanged with your bank or lender. This can help you in the event of dispute resolution, getting further help, understanding your obligations, what was agreed upon, and more.

Find a non-bank mortgage broker in New Zealand

If the bank can’t sort your situation, you consider a reputable non-bank lender being used. Rather than the major banks, New Zealand has many genuine smaller or alternative lending outfits, that can help people who have had past credit issues or other types of challenges.

Here at Mortgage Rescue, we provide mortgage broker services for non bank loans. It can be worth calling or emailing us right now to discuss the situation. We are based in New Zealand and can help Kiwis with their mortgage issues.

Don’t delay – call us sooner rather than later.

Sell the home or property

Although it might seem daunting, you may need to consider the option of selling your home as a way of resolving the situation. Your situation may just be unaffordable, and other methods of resolving the matter may not be suitable It may mean talking to a real estate agent, finding out the potential value of your home, and listing the property for sale.

Selling your home isn’t as bad as it may seem. Why? Because it’s possible your circumstances may have changed from the time you had bought the house.

Here are some reasons why selling could be an appealing prospect:

• You bought the house when you had young kids, and they have now grown up, moved out, or could move out. A smaller place could be more suitable, and cheaper for you.
• The house is too far from your workplace, hobbies, family, friends, anyways, and you could find something cheaper and smaller, but much more convenient, and also reduce financial pressure.
• The home is expensive to maintain or deteriorating in condition. You could potentially buy another property that is nicer and more modern, and doesn’t require so much in terms of maintenance or renovations.

Speak to a budgeting service

A budgeting service which has financial mentors may be able to talk to you about your finances. It’s possible that you are not managing your money as well as you could be. A few tweaks to how you manage that money could mean a difference in taking care of your finances. They may be able to guide you on where you could cut spending, or reduce debt levels, such as selling off a car, as ways of getting access to money or lowering your expenses. Reducing expenses and taking a good hard look at your budget may be one way of dealing with this.

You could speak to MoneyTalks for help to find a budgeting service in your area. You could also look up the budgeting tool available on Sorted.

Other ways of sorting if you cannot pay your mortgage options

This article gives a few general overviews, however every situation is different, and this article doesn’t necessarily cover all ways of sorting the situation if you cannot pay your mortgage.

You may also want to consider getting legal advice, and other options for help. You could consider seeking out help from a suitably qualified and experienced legal professional.

Get help if you cannot afford your home loan

If you are wanting to discuss options, call us now on 021 158 3156 or message us on our contact page. Or, use the “Apply Now” function to start figuring out if we may be able to find a way to help.

Generally speaking it’s worth making contact ASAP to get help. If you delay the matter, you run the risk of making the situation worse, damaging your credit rating, and possibly paying penalties, extra interest costs, and facing legal costs.

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Just Mortgages

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