Jason M
Site Admin
Joined: 27 Nov 2007
Posts: 12
Location: Brisbane, Qld
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 Posted: Thu Apr 24, 2008 2:21 am Post subject: What to do if you're in financial stress with your Mortgage |
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Note: The following information is for discussion and educational purposes only and is not intended as advice. It was written as a response to an overseas enquiry received by the Mortgage Rescue web-site online Enquiry Form.
Hi [NAME WITHHELD],
Thank you for your online enquiry at the Australian "Mortgage Rescue" web-site.
Our experience normally only relates to the Australian Mortgage products and local market, however I have decided to offer a few general tips which you may still find helpful. NOTE: Some of these ideas may not suit, due to differences in lender's policies, local laws and the current real estate market. Also, regardless of what is said please do not consider this as direct advice. You must make your own decision as to how you handle your situation and we make no guarantees that we can help.
As you read though this list, I kindly suggest that you be open to coming up with your own ideas which are better suited to your situation...
- Firstly, in our experience most lenders would rather hear from you as soon as you realise you are having difficulty keeping up with your repayments (i.e. contact them before they contact you). This shows them that you are still taking responsibility for your loan and you want to find a solution if possible. You may then find there is a way that they can help. If you wait for them to contact you, it typically becomes more difficult to negotiate.
- Has something recently happened which has made it more difficult for you to keep up with your repayments? I understand from what you have said that the value of your home has fallen considerably, but has this caused your lender to ask for more money, or is there another issue? Clearly identifying what the actual problem is is a vital step towards determining a solution. You might think you simply need more money, but usually money problems are caused by something deeper. I won't go into this now, however you might like to read the book "Think & Grow Rich" by Napoleon Hill (I expect it should be available from a public library or possibly even for online download if you search carefully for it). I highly recommend this book.
- Some lenders may allow you a period of time where they will reduce your repayments, for example this may help if you've had an unexpected expense pop up, or if you need extra time to organise another job (or seek a pay-rise), etc.
- Teamwork... Other people, such as family, friends and acquaintances can sometimes be a huge help. For example, would you consider allowing one or more extra people to share your home with you (and charge them rent)? Their money could then help you afford your repayments more easily. Another option could be for you to temporarily move out and share with family or friends, so that your house can then be fully rented out... This may give you enough extra income to get back in control of your loan repayments.
- The usual experience in Australia is that the longer you own a house, the more it increases in value. Certainly there are times where it may stay about the same in value, or even fall in value, but in the long run it almost always increases. Providing you feel this is the same in the area that you live in, then your solution should be focused on (A) INCREASING YOUR INCOME (i.e. available CASH) and/or (B) REDUCING YOUR EXPENSES. Increasing your income doesn't necessarily mean you have to work harder -- maybe you could sell something you own, such as an item of furniture you no longer need or even a bike or car if you have access to transport another way.
- Is your land large enough so that you could sell a PART of your land to someone else? Or, could you find someone willing to buy a share of your house? For example, you may agree that they can have a half-share for a fair price and then you can use this money to REDUCE YOUR DEBT. However they would then be entitled to you paying them a "half-rent" for being able to keep living in the home. It might not be an ideal solution, but if the numbers stack up it's better than being forced to sell when the market price is so low. Maybe you could even offer to buy back their half-share when your situation improves?
- Perhaps there is someone you know who has a good income and would be willing to help you make your repayments in exchange for a profit-share in the future increase in the value of your home? If you work out what you need each week, maybe you can place an advertisement on a public notice board (or on the internet) to attract an investor if you can't think of anyone you already know.
- You might try approaching other lenders to see if they will consider refinancing your loan to give you a better deal... A cheaper interest rate and/or a longer loan term should make your repayments more affordable. This may not be the best solution long-term, but if it helps reduce your expenses enough so that you can handle things until you are able to increase your income, then it might be worthwhile. Remember, what I am offering are just ideas which I hope will trigger your own idea of a solution for your situation.
As already mentioned, I don't know how appropriate these ideas will be for use outside of Australia. But the whole point is really just to get you focused on thinking that A SOLUTION IS POSSIBLE... As long as you have hope, then you have a chance. And if you can turn your hope into faith, then your ability to get through this will become much more powerful. I sincerely hope that something I have said will get you thinking about a possible solution which is ideally suited to your situation. If you've had any ideas come to you, please write them down.
It's really important to have the FAITH and BELIEF that you can get through this. Be open to an idea that might just occur to you; it could be something completely unexpected that leads to the solution (or person) that you need. One simple idea, combined with the appropriate action, could change your entire situation.
Tell yourself that it IS POSSIBLE that things can get easier and you won't give up until you find the way, no matter how long it takes. Make finding a solution so that you can keep your home your STRONGEST BURNING DESIRE. Another book I highly recommend is called "The Law of Attraction", by Michael Losier. See if you can grab a copy of this, as Michael has a great way of explaining how to focus on what you want and allow it to happen.
One last idea I'll leave you with is to consider saying the following affirmation to yourself as often as you can. In a way, you are hypnotising yourself to a more positive way of thinking. Try to really feel the meaning of the words as you say them and preferably speak it out loud as often as you feel comfortable (and above all, believe a solution is possible, even if you're not sure how. If you aren't ready to believe it, simply pretend!):
"No matter how things seem, I trust that I will find a solution so that I can keep my home. No matter what I have done or not done, I am worthy of money. I deserve to keep my home. I have faith that things can get easier and will get easier for me. I am grateful for what I already have in life and every day I will also be thoughtful towards others and consider their needs. I still have so much to give and life really does have meaning for me."
You have my best wishes in getting through this. All I ask is that you remember to help another (even if it's as simple as opening a door for them, carrying something for them, offering a genuine compliment, giving a smile to a stranger, sharing an umbrella in the rain, etc). I encourage you to do something to uplift another person each day and you might just be surprised at how the world treats you back -- give it a go and see for yourself what I mean. 
I'll finish off with a quote from my Great-Grandmother, "The people without shoes would complain, until they saw the people without feet".
Count your blessings and they somehow multiply... Give it a try! An act of kindness towards another is like a deposit into your own bank of life.
I have faith in you. Now it's your turn...
Kind Regards,
Jason.
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