The word ‘mortgage’ is French in origin. It means to make a pledge upon which your life depends – or, literally, an agreement until death.
It is estimated that perhaps as many as 1,000,000 Australians are experiencing mortgage stress, and perhaps 80,000 of those will lose their homes because they can no longer meet their mortgage repayments. If you don’t want to be one of the statistics, you’re going to have to take some action.
Around one million Australians are now suffering the most talked-about ‘material disease’ of today – mortgage stress. The symptom of mortgage stress is a mortgage payment which is more than thirty per cent of your net income.
So, if you earn a thousand dollars a week and the repayments on your home are more than three hundred dollars a week, you’re officially stressed.
* avoid that urge to have a $ 3.50/4.oo coffee or tea at the cafe or deli (4xtake 10 a month ..wow thats a lot)
*Turn of those extra lights / ( extra long showers ) in the house … look at you bill go down
*Have less lunches & dinners out ( wow.. what do u save 200 to 300 $ a month ). Pack a home made lunch to office
*These things might sound little and insignificant to many but it definitely makes an overall impact in paying you mortgage
* get a smaller fuel efficient car ( petrol is an ongoing expense)
* Downsize. The high cost and the stress of snobbery isn’t worth it
Here are some more tips on what you can do to avoid mortgage stress:
- Speak to your bank.
Banks can often work things out with you to keep you in your home if you chat with them early. Don’t leave it until it’s too late. Australian mortgage company Genworth Financial says that some solutions could include decreased repayments, interest only repayments for a set period, capitalising arrears on to the loan or repayment holidays (source: Rates ‘not biggest cause of mortgage stress’).
- Put a detailed budget together.
Work out where all of your money goes each week, and find out how much you are able to commit to a mortgage repayment.
- Cut your expenses.
Once you know where your money’s going each week, you can start to trim things down. For example, you could cut back on those extra things like dining out or trips to the movies in order to make enough available for your mortgage. Eat in, go cheap, and tighten your budget.
- Try and increase your income.
Either get a wage rise, or go and get a second (or third!) job. Mow some lawns, flip some burgers, tutor some local kids … whatever.
Everyone’s favourite finance commentator / morning TV show presenter, David Koch, has some tips to help you stay ahead of the interest rate rises. You might also like to take a look at “How to save your home” by Neil Jenman, and a report from Choice Magazine that outlines a few things you can do if you’re in mortgage stress.