Help With Home Loan Repayments

Home Loan Repayment Tips

A home loan is one of the biggest investment decisions that most people will make in their lives, so you should think carefully before taking the plunge. Also because home loans are taking out over such a long period of time you can make a huge difference to the length of the loan by being proactive in the first few years. You can do this by making the most of the following home loan repayment tips and advice.

• Before you even begin to apply for a home loan you should draw up a personal budget listing all of your regular income and expenses in order to work out whether or not you can afford the repayments on a home loan. Doing this will let you know the maximum amount that you can afford to borrow.
• Buying a house is such a big investment that it is very important that you read through the loan documentation thoroughly. Do not sign the loan contract until you fully understand it, including how much the repayments are, what fees are going to be charged and, if it is a fixed loan, what loan will it revert to once the fixed period is over. You may even want to have a family member or close friend read over it, as they may see something that you have overlooked.
• It is never a good idea to borrow the maximum amount of money that you are allowed to. Doing this would leave you open to serious problems if the interest rates statred to go up. So instead try to work out the minimum amount that you need to borrow, as this will save a substantial amount of money in interest repayments over the course of the home loan.
• One of the best home loan repayment tips is to get an all-in-one or 100% mortgage offset account and have all of your income deposited into this account. You should then pay for all of your normal day to day expenses on a credit card and take advantage of the 55 days interest free period. Finally the most important step to this tip is to pay off the credit card balance in full on the due date every month. This way you will not be charged any interest on your credit card purchases and your income in the offset account will significantly reduce your home loan interest.
• If you believe that your financal situation will be adversely affected by a series of interest rate rises then you should consider going for the security of a fixed interest home loan. This if particularly relevant if you are borrowing close to the limit of what you can afford.
• You can to be very careful when it comes to line of credit loans. If you use them to fund things like an overseas holiday or other lifestyle expenses then you must understand that you will end up paying a lot more for these things because of the interest repayments. Also by spending a lot on luxury products you may end up losing the house if you find yourself in financial difficulty later on.
• Most home loan lenders will give you the choice of weekly, fortnightly or monthly repayments. If this is the case then it is always best to go with weekly or fortnightly repayments. By doing this you will hardly notice any difference in your payments but over the course of the year you will in effect make 13 monthly payments into the loan account. So this tip will save you years and $1000's off your home loan.
• With standard variable home loans you should keep your repayment amount the same when the interest rate goes down. By doing this you will take years off the life of the home loan, save money on interest repayments and also create a pool of money that you can redraw if you need to in the future.
• Always ensure that you house is fully insured at all times, because you would not want to be left making home loan repayments for a house that isn't there any more. A lot of people don't check their insurance policy and would be shocked to find that if it burnt to the ground they would not receive enough money to rebuild it.

Contacts For Help With Home Loan Repayments

Nobody wants to be in the situation where the bank takes their home away from them. This is why it is vitally important that at the first sign of financial trouble you seek help with your home loan repayments. This doesn't necessarily mean that you have to be in arrears with your payments in order to seek help. Often the best time to ask for help is just as you are beginning to struggle paying the bills, because at this point there are so many more options available to you.

Outlined below are some of the organizations that you should consider contacting in order to get help with your home loan repayments :

1. The first port of call for any home loan help should be the bank or finance company that loaned you the money. Call them up and ask to talk to their financial hardship officer. Every reputable home loan lender should have one. Explain to them your situation and if it's a temporary problem like a loss of a job then they should be able to alter your repayments for a short period of time. If it is a more longer term problem then you can discuss with them your other options.
2. Many people believe that they can call the Financial Ombudsman Service if they are having troubles paying their home loan. This, however, is not the case as they deal with disputes over wrong interest rate calculations, incorrect charges and service complaints. They may be able to help you if your home loan lender has not given your request for financial hardship proper consideration, so if this is the case you should contact them on 1300 780 808.
3. There are a number of Free Financial Councellors available in every state and territory in Australia. They will be able to assist you by offering information and advice on options you have in dealing with your debt troubles. They specialize in advising you on what you to do next given your current financial situation. Below is a list of phone number for finance councellors in each state :
       NSW : 1800 808 488
       VIC : (03) 9663 2000
       QLD : (07) 3321 3192
       SA : (08) 8202 5180
       WA : 1800 889 364
       TAS : 1800 243 232
       NT : 1800 898 500
       ACT : (02) 6257 1788
   
4. Another option that you may want to consider is using a debt consolidation company or mortage broker to refinance your home loan with a cheaper alternative. It is essential that you realize, however, that this option is only a good solution provided that you have put in place procedures to ensure that you won't get into financial troubles again. Generally this will involve creating and sticking to a household budget so that your expenses do not exceed your income.

If there is some loan terminology or abbreviation that you are unsure about the meaning off then you can check out the home loan definitions page, which has a detailed explaination about some of the more confusing aspects of getting a home loan.

More Home Loan Information :

1. Australian Home Loan Types
2. How To Get A Home Loan
3. Home Loan Application
4. Home Loan Approval
5. Help With Home Loan Repayments
6. Home Loan Definitions