If you are behind on your mortgage payments and your current financial position is causing you to consider resorting to a circumstance in which you eventually say to yourself, “I m unable to pay my mortgage and need someone to help.” Following this realization, an assumption may be a realistic option for saving your house from foreclosure. The new owner is individually liable for the outstanding mortgage obligation as soon as he or she takes over the loan.
Another situation is that if you inherit a mortgaged home or receive ownership via a divorce or other intra-family transfer but are unable to make payments, you may be allowed to keep the property if you accept the debt as part of a loan modification.
Inform your lender that you are experiencing financial difficulties
All lenders have teams of people that are ready to assist consumers who are going through a difficult moment.
You may be able to modify the conditions of your loan, as well as temporarily halt or lower monthly repayments, depending on your situation. A hardship variant is what this is referred to as.
Customers who have lost income as a result of COVID-19 may be eligible for mortgage repayment deferrals from several financial institutions. If you choose to delay repayments, you will still be responsible for all of the payments you have missed, as well as interest. Continue to make payments if you can afford to do so, even if they are reduced in size. This will assist you in keeping the cost of your mortgage as low as possible.
Fill out an application for a hardship variant
- Make contact with the ‘hardship officer’ assigned to your lender.
- Provide the specifics of your loan (account name and number, and the amount you pay each fortnight or month).
- Assume that you are facing financial difficulties and want to modify your loan payback schedule.
- Provide a detailed explanation of why you are experiencing difficulty making payments. Inform them of how long you expect your financial difficulties to last and how much you are able to afford to reimburse them.
The example letter generator provided by the Financial Rights Legal Centre might assist you in creating a letter to submit to your lender.
Within 21 days of receiving your hardship request, your lender must write to you to inform you of the result of your request. If they request further information from you, they must answer within 21 days after receiving your information.
A hardship variation is approved if your lender agrees to it
- Negotiate a monthly or fortnightly payment amount that you can afford to make on a consistent basis.
- Make a strategy for getting back on track. Examine your financial situation to determine if there is anything you can do to save money or manage your finances more effectively.
- Consult with the customer service representatives at your utility providers about paying your energy, gas, phone, or water bills in installments. Consider shopping around to see if you can find a better offer.
- If you find yourself unable to fulfill the requirements of the new payment plan, you should contact your bank to explore your options.
Consider the possibility of selling your house
If your financial situation is unlikely to change, it may be in your best interests to sell your property.
This is a difficult conclusion to come to. However, it is preferable to sell your property on your own rather than having a lender take control and sell it. You’re more likely to receive a better deal, and you’ll avoid having to pay any legal fees that the lender passes on to you.
Selling your property is a major decision, so consult with a financial advisor or seek legal assistance before proceeding with the sale.
It is also possible to live someplace else and rent out your property until you are able to make the repayments on your mortgage once again.
If you decide to sell, there are a few things to consider
Notify your lender if you intend to sell your home. They may request evidence of your claim. The contract with the real estate agent, the contract of sale, and any ads might all be included in this folder as evidence of the transaction.
If you fall behind on your mortgage payments, your lender may:
Notice of Default
Your lender has the right to issue you a default notice the day after your payment is past due. They may, however, wait until your payback is 90 days or more past due before taking action. After receiving the default notice, you will have 30 days to make up for the payments you’ve missed, as well as the usual monthly loan repayment. At this point, you may still submit an application for a hardship variant.
Following the expiration of the 30-day default period
This is the point at which we will take legal action against you in order to recover the whole amount of your home loan.
In order to register a defense or file a dispute with a dispute resolution system, you must do so within a certain number of days. The number of days varies from state to state or territory to territory.
If you do nothing, your lender has the right to initiate legal proceedings to seize your residence.
If you get a Statement of Claim, you should seek legal counsel.
