Lockdown Tips for Existing and Prospective borrowers

30th Aug, 2021 | First Home Buyer, Investor

In this article:
Here are some easy and practical tips any existing or prospective borrower could consider taking during the ongoing lockdown.
Irrespective of the impact the lockdown has had on your finances, timely action on your part can provide a major boost to your financial wellbeing. Here are some easy and practical tips any existing or prospective borrower could consider taking during the ongoing lockdown.

If you are an existing borrower

#1 Who has been financially impacted

If you’ve seen a decline in individual income or in business revenue, make sure you get access to all the financial help you can.
  • Check your eligibility for Government support: Businesses and individuals that the lockdown has financially impacted are eligible to receive payments from their state government. Visit your state government’s website to check if you qualify for financial support. If you do, collect the necessary documentation, and apply as soon as possible.
  • Access your financial situation with your lender: If you anticipate that it may become challenging for you to keep up with your mortgage repayments, proactively connect with your lender and request an assessment of your financial situation. While lenders are offering affected borrowers the option to put mortgage repayments on hold, the process to do so this time around involves far more scrutiny and documentation and has a longer turnaround time than deferments made in the first half of 2020. Missing a mortgage repayment before getting a repayment deferral authorised from your lender could seriously impact your credit score and make it harder for you to get finance in the future. 

We have you covered on all stages of your property journey

#2 Who is financially secure 

If the lockdown hasn’t affected you financially and your income continues to be stable, then consider paying more into your mortgage. In the absence of transport expenses and no recreation avenues, most households that the lockdown hasn’t financially impacted have seen a healthy rise in savings. What’s more, is that your lender has whetted your ability to make repayments against a test rate that is usually 1-2% higher than the rate your loan settles at. With low expenses and the ability to make payments at a higher interest rate, you are in fact, in a comfortable position to put more funds into your mortgage and pay it off sooner.

If you are a prospective borrower

  • If you have a stable income, don’t expect a decline in your earnings and are looking to buy property, this could be the perfect time to make your move. Here are a few important things to be mindful of.
    This current lockdown has put restrictions on several buyers relating to property accessibility and income instability in case the lockdown has impacted them.
  • Fewer buyers in the market give you a slight advantage and put you in a better negotiating position.
    Ensure you do your due diligence in terms of inspections (pest, structural soundness, and council approvals)
  • Get your property contract professionally evaluated by a solicitor or contractor.
  • If all your loan paperwork is in order, there is unlikely to be any delay in releasing funds as banking is an essential service.

Whether the lockdown has financially impacted you or not, acting fast is imperative. The most straightforward approach to doing so is to rely on the professional guidance of a mortgage broker. Mortgage broker services are usually free for borrowers. In addition to scoping the market for the right loan match, your broker will also handle all your loan paperwork. 

Reach us for the best way forward for your circumstances.

The information is a compilation from various sources for your benefit and should not be relied upon in lieu of appropriate professional advice.