Are you impacted financially by COVID-19?
At Harken Finance we are committed to taking some of the pressure off by giving you options to better navigate the world we are experiencing right now.
So far, the response to COVID-19 and home loan repayments from the major lenders and most of the smaller lenders has been good.
Most lenders have set up a simple system online to apply for a “pause” on home loan repayments. Lenders may require evidence that you have been financially impacted through unemployment, reduction of hours or a decline in business.
The plans vary with each lender, but it is important to note that interest will accure and will be added to the loan balancve each month. At the end of the repayment deferral, some lenders will adjust the loan term according to the “pause” period, others will recalculate the repayment over the remaining loan term.
Lenders have indicated that offset accounts and existing interest rates will continue to be in place and that a “pause” on repayments won’t affect customers credit files. However, we are yet to see this with most lenders now engaged in positive credit reporting.
Our first tip is for those who have been financially impacted consider what is the best option to maintain cashflow within your households. The second tip is don’t wait until you are in arrears on your home loan. In most cases the “pause” option is not available to customers who are already behind in their home loan repayments. And finally, if there is money in your redraw, the suggestion is, take it out before your start the “pause” as it will be absorbed with interest capitalising on your home loan and reduce what you have available.
If you have not been financially impacted yet or you don’t want to take a “pause” on your repayments other we can assist with other options that may include:
- Use funds in your redraw to cover loan repayments.
- Reduce your repayments to the minimum.
- Extend your loan term to reduce your repayments.
- Change your home loan product to get a lower interest rate.
- Ask the lender for an interest rate reduction.
- Consider refinancing to another lender.
These are “options” not recommendations. Your Broker will guide you through these and assist you to work out the most suitable option for your personal situation. (Broker details below)
Thank you, kind regards Harry