Green Square Blog

This article has been written by Chris Booth, the Head of Mortgages and Lending at Infocus Australia.

If you would like to discuss your situation with Chris, his contact details are below

 

If you’re a landlord, you’ll most likely have a mortgage in place against your investment property, and many of you will have a myriad of other debts and financial commitments in place.

To add to the financial stress, there are also many of you that sadly will have already suffered a full or partial income loss, and it is possible that you might now also have had your tenants advise you of their lack of ability to continue with their full rental payment.

 

What have the Government done so far?

As you may know, a protection feature has been brought in by the government to protect tenants with the news that they cannot be evicted for a period of six months, no matter how little rent they pay.

While the long term ramifications of this are yet to be worked out, the short term implications are clear, so it’s more important than ever to manage your finances over the next six months.

 

What should you do?

For your tenant and rental situation, it is critical that you communicate with the Raine & Horne Green Square team, who will work with your tenant to achieve a workable solution. For tenants who have lost their full income, they might be able to receive some government income support to assist with paying their rent over the coming months.

For all of your lending institutions though, formal hardship arrangements are at hand and can be just a phone call away.

The RBA & APRA have worked with lenders to create not just some physical assistance measures, but more importantly, have created an environment where lenders are going to be working with their borrowers to help them through COVID-19 related financial issues without penalising the borrowers for doing so.  

The most basic and formal arrangement available to all personal and business mortgage holders is that all customers financially affected by the coronavirus will be able to apply for an initial three month repayment holiday with a further three months also able to be applied at the conclusion of the initial three months.

Some other actions can also be considered by your lender in terms of loan restructuring to create an interest-only period or provide a reduced fixed interest rate, and in most cases, they will also waive some loan restructuring fees.

A similar arrangement could also be arranged on motor vehicle loans, personal loans and credit card debt.

 

An important note - ‘there’s no such thing as a free lunch’

It’s important to note that these arrangements are not interest-free. Interest will accumulate as normal during the repayment holiday period, but this will be the most immediate and effective way for clients to obtain some short term cashflow relief.

Much of the red tape has been removed with these measures, and a repayment holiday under these circumstances will not show on your credit report or impact your credit rating.

 

Want to speak to a mortgage expert?

The team at Infocus Lending Advisory are here to help, and in these circumstances, we have agreed to provide this as a complimentary service to the landlord clients of Trevor and his team at Raine & Horne Green Square.

If you would like to discuss your situation, feel free to email me at chris.booth@infocus.com.au, and we will contact you within the day.

We’ll start the process with a conversation, investigate your situation and provide a personalised solution from there.

We’re here to help, so don’t hesitate to make contact.