Boom or bust: investors risk losing it all
COFFS Coast residents investing in housing may be at risk of losing it all due to over committing their mortgages in the current economic climate.
Anglicare North Coast financial counsellor John Fuller, who has been in the job for more than 10 years, said the last 12 months has seen an increase in the number of concerned people seeking financial advice.
“A lot more people are worried because they own a house and, due to other lending, they are in grave danger of losing their house,” Mr Fuller said.
“The latest concern is mortgage over commitment, where people have decided to buy investment properties but have gone into it too early and the equity in their home can't cover it.”
Mr Fuller said people are in danger of losing their homes due to other lending, such as credit cards, car loans and cross mortgages.
“People have trouble making the payments, since with a cross mortgage you're mortgaging one property to buy another,” he said.
Brokers the Mortgage Gallery recommend selecting a home loan option that allows you to quickly reduce your home loan debt commitments.
“For example, through the use of offset accounts, a borrower may significantly reduce the term of the loan and save thousands of dollars,” a spokesman for the Mortgage Gallery told the Coffs Coast Advocate.
But Residex chairman, John Edwards, said while many may see this period as a time of high risk, the perception is incorrect for those investing in housing.
“Investing in housing now presents a lower risk equation than it did during the period of high growth,” Mr Edwards said.
“With the abundance of bargains in the marketplace, even if house prices do fall, your bargain is unlikely to.”