It’s very hard to pay off debt when you are accruing fees on top. When we sign up for a home loan we can get so caught up in the dream of owning a home that we haven’t suitably prepared for the actual impact the repayments will have on our life. The main problem is, if you have a bad week and miss a payment, you will be stung with a fee and magnify your home loan repayment woes.
What are mortgage repayment fees?
Mortgage repayment fees are the amounts of money that mortgage lenders can charge a borrower when they are late making their repayments. These fees differ between each financial institution with some charging as much as $195. Speak with your financial institution to find out what their fees and charges are set at. To avoid these fees borrowers must ensure that they pay the correct amount by the due date.
Being late with your home loan repayments can start a dangerous cycle, as once you start incurring late fees on top of your mortgage debt you can quickly end up in over your head.
To avoid late fees that could cost you hundreds and risk falling seriously behind in your payments, get organised and sort out a budget. You need to know how much money is coming in and going out each week so that you can budget in your mortgage repayments. The repayments need to be your priority but so does having some extra money aside for a rainy day. This will put your mind at ease and help you sleep better at night too.
What to do if you miss a mortgage repayment?
- Contact your lender to notify them why you missed your payment, explain how you would like to make up the missed payment and ask for their assistance if needed.
- Sit down and lay out your budget, clearly marking all your expenditures. You might be surprised to find out where your money is actually going and where you can tighten the shoe strings in one part of your life to accommodate your mortgage repayments.
- Assess your options: If you can, try and get the funds from somewhere to get your payments back on track. Alternatively, chat to your lender about changing the terms of your loan to accommodate your short-term financial difficulties or talk to the ombudsman if you can’t resolve the matter with your lender. If worse comes to worse and you can no longer afford the repayments, selling your home may be an option.
It’s vitally important that you conduct your own research before you sign up for a home loan. Calculate your mortgage repayments, compare Aussie home loans and work out your budget, being very honest about your incomings and outgoings.