COVID-19 has brought with it a number of financial challenges for many Australians. Over the last few weeks we have been working with our clients to help them work through their individual situations. We wanted to share some of our most frequently asked questions and answers in the hope they help you too.
What should I do if I lose part or all of my income?
The first thing you need to do is ask for help, so you are off to a good start reading this. The answers to these questions depend on many different things, so here are some steps to take if you are concerned about the effect of COVID-19 on your financial situation.
- Speak to your financial adviser and accountant. Get further expert information from your accountant/financial adviser who can direct you to government incentives and exemptions for your business, plus give you tax advice.
- Speak to your mortgage broker. Right now, Oxygen brokers are educating and supporting their clients to understand their options when it comes to their home loan, empowering the client with information before they engage their lender to discuss financial difficulty. Each individual’s circumstances will be entirely different, plus not all lender’s policies are the same. A mortgage broker can help you navigate the lenders criteria and empower you with the right questions to ask the lender. While a deferred repayment sounds like a great idea, it may not be the best plan for you personally and there may be other options. If you CAN pay, then it may be more beneficial to continue if it is feasible. A broker can look at the entire picture in line with their thorough knowledge of the lenders.
- Contact your lenders and creditors. Most have COVID-19 policies and procedures in place to help their clients experiencing financial difficulty. Check your lender’s website, to see if they have information that can help you. If you can’t make a payment now, need more time, or want to discuss payment options, contact your lender to let them know about your situation. Sooner rather than later. Also, credit card companies may be able to offer you a number of options to help you. This could include waiving fees like ATM and overdraft or late fees, and potentially delaying, adjusting, or pausing some payments.
When contacting your lenders be prepared to explain:
- Your full financial and employment situation
- How much you can afford to pay
- When you’re likely to be able to restart regular payments
- Be prepared to discuss your income, expenses and assets
Are the banks still lending money?
Of course, the answer is yes, however there is potentially more in-depth assessment dependent on which industry you work in. Work with your broker as they can help you now more than ever before with navigating the most up-to-date information across a wide range of lenders.
I am having problems paying my mortgage. What do I need to do?
If you are struggling with your home loan repayments, there is help available through your lenders COVID-19 banking support. All lenders have teams in place ready to help their customers. Click here for lender hardship contact details.
It is important that you contact them as early as possible as they may be able to change the terms of your loan or temporarily pause or reduce your payments.
Top tip: Don’t just go to payment deferral as first choice, talk to your mortgage broker about the best path for you and your individual circumstance. As there could be consequences to decisions you make that affect your credit rating, in situations where you may not be up to date with your repayments.
I have recently purchased, pending settlement. Is my approval still ok?
Short answer is yes. Reach out to your broker as they can help you with the most up to date information and of course laying out the options for your individual circumstances. Lenders are assessing changes to purchaser’s situations prior to settlement.
I am planning to purchase now or very soon. What do I need to do?
Firstly, seek a cooling-off period wherever possible and for 10 days if possible. Valuation delays and potential issues with low valuations are becoming common, plus banks are experiencing a high volume of extra work, leading to delays.
Also, speak to your solicitor about the potential to include a COVID-19 clause in the contract of sale in case of issues with either settlement or approval.
Now more than ever people need to be getting the most up to date advice, and where possible get it in writing as a back-up to confirm agreed solutions.
Banks are doing their best to work with their customers to help in these trying times.