Sometimes life throws at us the unexpected. The loss of a job or the arrival of a new family member can have a big impact on our ability to keep on top of our mortgage repayments. If you are struggling to make your next payment or have already defaulted on your home loan, get in touch so we can help.

The best advice we can give is to act early. The quicker you act, the better position we will be in to negotiate a management plan with your lender. We’ve helped many clients out in this situation, but you need to take the first steps by getting in touch.

I can’t make this mortgage payment!

Your lender will be far more reasonable if you address the problem before you miss your first payment. We will help negotiate a solution to allow you to get back on your feet, or give you time to sell your property at the correct market value. In New Zealand, a number of banks have hardship funds to help those borrowers experiencing financial difficulty.

If you are facing significant financial hardship, you may be able to withdraw some of your KiwiSaver savings. We can talk you through the process, or you can find out more information here. As we have stressed call us as soon as you realise you may not be able to make a payment. Taking action will be seen as positive in the eye of the lender, who will be far more willing to cooperate in finding you a solution.

Missing more than one payment

If you have missed more than one payment, you need to think of viable ways to cover your shortfall. Your options could include selling assets, changing the terms of your loan, refinancing or potentially renting the property until the arrears are sorted. I will talk you through the best solutions for your current and long-term plans.

Letter of demand

If you are three months behind on your repayments, the bank can issue a letter of demand. This will outline the timeframe in which to pay your arrears plus any accrued interest or fees. We can still offer you a solution at this stage and look into changing lenders or entering a repayment plan. If the problem is ignored, a Property Law Act (PLA) notice will be served. The PLA notice will give the lender no less than four weeks to rectify the situation, and explain what the lender is entitled to do if you are unable to come up with the funds.

The next steps may be beyond your control and could see your property forced into a mortgagee sale.

Mortgagee sale

If you are unable to meet your mortgage obligations or find a viable solution to get your debt back on track, you may be forced into selling your property. Under the Property Law Act, the lender owes you a duty of reasonable care to get a reasonable sale price and must contract a real estate agent to market the property for at least four weeks.

If the house sells for less than you owe, you still have to repay the remaining debt. This could include selling costs, legal fees and penalty interest rates.

Remember you need not be alone if you find yourself in financial strife, but we can’t help until you take the first steps. Whatever stage you are at in the process, contact us and we will exhaust every avenue to help you keep your house or avoid a mortgagee sale. Do not bury your head in the sand; the faster you act, the more positive the outcome.

Contact me today.