A home loan is a long term commitment, it is very likely your biggest financial commitment you’ll ever make. The average term on a home loan is about 20 years and during that time you need to continually ensure that you’re not falling behind on home loan repayments.
The problem is that 20 years is a long time and very often homeowners do go into arrears, or are not able to pay their bond instalments for a few months.
Home loans often need two incomes to support their instalment, and if one income changes or drops suddenly, that can have a significant impact on your affordability, which means you might battle to meet your mortgage instalments
What should ideally happen, is that people should look to try and create a little bit of scope (or buffer) by paying in extra into their mortgage when they can. An access bond is ideal for this purpose. That way. if you begin falling behind on home loan repayments, the bank will look at things more favourably should something occur.
What to do you are falling behind on home loan repayments
The first thing you should consider is to approach your bank and be proactive in trying to find a solution and work with your bank to manage any arrears on your home loan account.
A lot of people get into arrears for many different factors, sometimes its just overspending on a lifestyle that on a long term basis they cannot afford.
Changing your lifestyle can help to make you bond repayments more manageable.
Another option would be to down scale you home, by selling up and buying a smaller property. Smaller properties are not only cheaper and usually require less costly maintenance as well.
Alternatively, you might consider a sell-to-rent-back option, which means you won’t have to move out of your home at all.
Note, if the mortgage starts to get more seriously into arrears, and multiple payments get missed, obviously there is a consequence that your could lose your home.