A mortgage broker has urged borrowers facing the end of their repayment holidays not to “cave into pressure or bullying from banks” if they truly cannot afford to resume servicing their home loans.
“Mortgage holders facing the dilemma over whether to resume repayments or seek a further deferral should not feel under any extra pressure over this decision,” said CGIO Finance owner and mortgage broker Cara Giovinazzo.
“The main thing these borrowers need to keep in mind is they do have a range of options. This includes negotiating a solution with their lender such as switching to interest only repayments for a year or reducing payments.
“If borrowers are still facing financial hardship, they should have confidence from ASIC’s assurances that they will be treated sympathetically by their bank and not bullied.”
Giovinazzo emphasised that the guiding principle banks have been provided by ASIC is to avoid defaults, evictions and forced sales where possible.
"Many thousands of borrowers may have already advised lenders they can resume payments, but those in doubt should know how much their future repayments will be, how much extra interest they will have to pay and whether this is affordable,” said the Queensland-based broker.
“The lender should be contacting the home loan customer prior to their repayment deferral expiring and clearly setting out available options and providing information to help them make a decision.
“This includes extending the length of the loan, converting to interest-only payments for a period of time, consolidating debt or a combination of these and other measures.”
Giovinazzo encouraged borrowers who are not confident about the state of their home loan or the best way forward to contact an experienced mortgage broker for additional guidance.
She also reminded “people unhappy with the decisions or actions of their lender” that they are able to contact the Australian Financial Complaints Authority (AFCA) for free and independent advice or to lodge a complaint.
