How do I work out my best option - Mortgage stress
What you should do if you are behind in mortgage repayments will often depend on whether your financial troubles are temporary, or are likely to last for a while.
It may help to speak to a free financial counsellor if you are not sure how long your problems are going to last, and to get help working out what to do.
What if my problems are short term?
If you think your financial problems can be sorted out quite quickly, you will need to look at your options to catch up on repayments. This could involve applying for a hardship variation.
- For example, if you are in arrears because you lost your job, but you are very confident you will get another one quickly and then be able to pay your mortgage payments again.
It may help to speak to a free financial counsellor for help in budgeting. You can get more information about creating a budget from the MoneySmart website
What if my problems are long term?
If your circumstances look like they will not change, you may need to consider selling your property.
- For example, you are unemployed and do not expect to get a similar job soon, or cannot work because of illness or injury and cannot get any insurance payouts.
If you do this before your lender takes you to court, you will save money on legal and enforcement costs. This can also make it more likely that you sell your home on your terms, for a better price, rather than a forced sale by the lender. Speak to a financial counsellor about your best option.
If you decide selling is your best option, you may need to apply for a hardship variation to change your repayments until you can sell the property.
What if I am experiencing financial hardship following a relationship breakdown?
If you were in a marriage or a de-facto relationship and are both named as the borrowers on the loan contract, both you and your former partner are each responsible to keep paying the mortgage. This is called being 'jointly and severally liable'. If you are jointly and severally liable, any default on the loan payments may be claimed against either or both of you, regardless of who is living in the property.
If you are suffering financial hardship as a result of your relationship breakdown, you may have options in the Family Court of WA and should get urgent legal advice.