In the wake of Poverty Week, UnitingCare Community is encouraging those who may be experiencing mortgage stress to stop a small problem from turning into a big one by seeking free independent advice through UnitingCare Community’s Financial First Aid Line (1800 007 007).

Illness, reduced work hours and relationship issues are all common triggers for the start of what is commonly referred to as “mortgage stress”.

UnitingCare Community Financial Counsellor Robyn Underwood said mortgage stress can have devastating consequences on individuals and families as they worry about losing their home.

“In these difficult financial times, many people are just one paycheck away from not being able to pay their mortgage,” Ms Underwood said.

“Others in the community are managing to sustain their mortgage payments by using credit cards or short term loans for household expenses and other essential items and this can often compound the hardship.

“Taking early action is the key because this can stop a small problem turning into a big one. If a borrower waits for the legal process to commence, it is much harder to take action as options reduce the further down the chain you get.

“If you wait until the lender has an order to take possession of your home, there is next to nothing that can be done,” she said.

There are many resources freely available that can help those experiencing financial hardship take early action. An excellent place to start is the Government’s website www.moneysmart.gov.au which includes an online mortgage health check tool.

“Whatever stage you’re at, chatting to someone knowledgeable about the options available can help enormously, both with anxiety levels and with the practical steps to take,” Ms Underwood said.

To make an appointment to see a Financial Counsellor, call the Financial First Aid Line on 1800 007 007. The Counsellors on the phone will assess your situation, give general advice on actions you can take and make a face-to-face appointment for you with a local Financial Counsellor if a solution can not be reached over the phone.

UnitingCare Community would like to share some practical steps people can take to help reduce their mortgage stress:

• If you feel that you should be able to manage the repayments, perhaps all that’s needed is more rigorous budgeting – take a look at the section on budgets at www.moneysmart.gov.au
• There may be other ways of funding your mortgage payments or clearing your arrears – for example, renting out your home and living somewhere cheaper, taking in a boarder, getting help from family and friends, accessing the Government’s Mortgage Relief Loan (if eligible), withdrawing your superannuation (if eligible) or selling other assets.
• You may be able to refinance your home loan if you can get a cheaper rate.
• You may be able to apply for lower repayment arrangements on other debts, such as credit cards, while you catch up on your mortgage.
• If your problems are short-term (say, 3-6 months), then your lender may be agreeable to a change in your mortgage repayments for a limited period of time.
• If your problems are longer term, then your lender may agree to permanently change your mortgage repayments.
• If your situation is more serious, or you can’t work things out with your lender, it could well be time to access one of the external dispute resolution schemes, arrange a free legal consultation with one of the Community law services or see a Financial Counsellor.  The Australian Credit Law does give you some important financial hardship rights and a lawyer or Financial Counsellor can explain them to you.