How to manage your loan in times of change
‘Times they are a changin’ is the 1964 Bob Dylan classic but 54 years later those words have never been more relevant. We have a change of Prime Minister almost annually now and of course we have the ongoing reality of climate change (unless you’re a climate denier of course). In the world of home loan finance, it has also never been more complicated with regulatory focus and policy change a daily feature of our inbox. People’s lives change too, whether it be through job loss or a relationship breakdown.
What can you do, to best manage your lending in this constant state of flux?
- Know your loan and know your rate – speak to a Broker about your loan to ensure that you are structured the way you should be and that your rate is competitive. Re-price where possible and re-finance if necessary.
- Create a buffer – in case of job loss or emergency it is essential to have a cash buffer. The best way in my view is with funds safely parked in an Offset or Redraw – only to be accessed in an emergency (overseas holidays are not an emergency) and to cover at least 3 months of living expenses
- Don’t leave change too late – if you need to refinance, the best time to do it is when you have stable employment. Times like unemployment (and even maternity leave) can limit your ability to refinance so it’s often best to review your loan when you are in steady employment.
- Plan ahead – a Broker will want to know about your future plans as well your more immediate needs. This is so that you can be set up for your future lending requirements. We don’t have a crystal ball but any insight into what the future looks like can assist your lending selections now.
What if I’m falling behind?
Contrary to some doomsayers, lenders do not want to re-possess a borrower’s home at the first sign of financial distress. If you do find yourself struggling with change in your life and it is impacting your ability to make loan payments, then there are avenues to seek assistance. Visit the ASIC Moneysmart site or speak with your Broker or lender to find out more.
Douglas Piening is a Mortgage and Finance Broker with Piening Financial Solutions and is passionate about providing advice you can trust. Whether it’s buying a home, refinancing a loan, investing, building or renovating, Doug brings a wealth of knowledge and expertise to assist with your lending needs.
You can contact Doug at firstname.lastname@example.org or (m) 0408 671 524.
Want to hear what clients have said about working with Doug? Take a look at these reviews from LinkedIn and Facebook.
This information is of a general nature only and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.