How to avoid losing your home

Noel Whittaker
Noel Whittaker

DESPITE rates dropping there is still a growing number of people who are losing their homes because their mortgage has fallen into arrears.

The first indication that your lender is considering action may be when you receive a Default Notice - this means that your situation is serious. Treat it as a call to action.  

First go to the ASIC website www.moneysmart.gov.au and click on Managing Your Money.  This will take you to a section called Problems Paying Your Mortgage which contains information to help you get back on track, and also includes case studies about people who have successfully restored their finances. 

You need to identify what is causing the problem.  It could be a sudden event such as loss of a job or sickness, but usually it is the slow accumulation of credit card debts and personal loans that have built up because you have been spending more than you earn.  If this is the case you had better start budgeting quickly. 

Talk to your lender immediately to decide whether it is realistic to work your way out of the problem.  If the situation appears hopeless adopt what is called "a sale with dignity" strategy.  This means working with the lender to market the property in an orderly manner with the aim of achieving the best price possible. 

You should also involve both a solicitor and a financial counsellor.  The first will ensure your rights are protected, and the second should be able to assist you to handle your finances better.  The ASIC website will help you here too - it lists the location of all financial counsellors, and also provides the universal number 1800 007 007 that will enable you to contact one in your area. 

Under Free Legal Advice the website will also direct you to your nearest Legal Aid office and to community legal centres.

Falling behind in your mortgage can be a frightening experience, but there is a wealth of resources available to help you keep your home and get back on track.  The quicker you use them and take action the more likely success will be.

Noel Whittaker is a co-founder of Whittaker Macnaught Pty Ltd.  His advice is general in nature and readers should seek their own professional advice before making any financial decisions.  His email is noelwhit@gmail.com

Topics:  asic, default, interest rates, mortgage



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