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Tough Times And Protecting Your Credit Rating
There are places available to get free advice, such as mortgage brokers, so if you get into financial difficulty you should look it up. Unfortunately for some people personal debt levels can reach a point of no return. Some people spend a lot of money. Sometimes more than they should spend. Sometimes more than we earn. So when recessionary times hit, it can be a good time to take a look at your finances and make changes before it’s too late. Australians are different to the Swiss, for example, and do not invest heavily in bank deposits, pension plans, investment funds, shares or property portfolios. The Swiss show great restraint with the use of credit cards - definitely a trait we would be wise to emulate. Australians, on the other hand, love to spend - and if spending gets unsustainable, well, banks are banks and when they want their money they can enforce the law to the full extent. Unfortunately some Australian home owners have had to give up their homes due to excessive household debt. If you’re downsizing due to the crisis, make sure you take a mortgage you can afford. Don’t borrow more than you can afford to pay back and ensure that you have enough in reserve to cover minor emergencies. If you do have to downsize, it is better to do it of your own accord and protect your credit file. In addition to downsizing, there are other options available such as payment holidays. If you are in financial distress, the Uniform Consumer Credit Code allows you to apply for an extension on the term of your home loan, which could provide some relief. You are covered by the Code if the loan was for personal rather than commercial use. Basically putting money into a business or investment property is out, but car loans, mortgages, personal loans, consumer leases or credit cards with debts less than twelve years old are in. There is also a size limit to the loans covered. The maximum loan size covered is about $280,000. As a last resort, you can access your super. Accessing your super and then losing your home further down the track means you are left with no home and less super. But if you find yourself in a difficult situation, it is possible. Be sure to avoid predatory lenders who prey on people in financial difficulty. The Australian Securities and Investments Commission has analysed two 'refinancing experts' in detail and found that these brokers charged fees up to 22 times the industry standard, in one case representing more than 20% of the remaining equity in the home. ASIC suggests the following hints; deal only with a licensed financial advisory business, take the time to find the best person for your needs, make sure the advice suits you and offers value for money. Article Directory: http://www.articledashboard.com Your local firm of Mortgage Brokers are standing by to help you with your next home loan at www.moneynet.com.au/. Contact us today. www.moneynet.com.au/ |
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