Every lender has their own terms and conditions, and this is intended only as a general guide to understanding this topic. Contact us to discuss your individual circumstances.
Life events such as unemployment, health issues, relationship separation and natural disasters can impact your ability to meet your home loan commitments. In such events you can ask your home loan provider for a hardship variation to change the terms of your loan.
Prior to approaching your lender, talk to me first and we can discuss what alternatives to consider and the impacts on your future borrowing capacity with your current or a new lender.
Here are some possible changes to the terms of your loan:
✓Extend your loan period, so you make smaller repayments over a longer period.
✓Postpone your repayments for an agreed period.
✓Extend your loan period AND postpone your repayments for an agreed period.
When negotiating a repayment plan, make sure you can afford it. There is no point agreeing to an amount that is too high for you to pay
If you find you can’t stick to the new arrangement, tell your Lender straight away. Keep paying as much as you can afford, even if it is not as much as the Lender is asking for.
Once we’ve discussed your options, the steps to apply for hardship variation are:
✓Contact your Lender – by phone or in writing.
✓Ask to speak to a ‘hardship officer’ or to a ‘customer service officer’.
✓Give the details of your loan (account name and number, and the amount you pay each week/fortnight/month).
✓Say that you want to change your loan repayments because you are experiencing hardship (as set out in section 72 of the National Consumer Credit Code).
✓Explain why you are having difficulties making payments, how long you think your financial problems will continue and how much you can afford to repay.
When you apply for a hardship variation, the Lender has a legal obligation to respond to you in writing within 21 days letting you know the outcome of your hardship request (unless more information is needed from you).
Things to consider
✓Depending on when you took the home loan out, there are different thresholds (maximum amounts allowed) for accessing a hardship variation.
✓If your Lender refuses your hardship application, they must give reasons. If you are not happy with their response, you can ask to speak to their internal complaints section.
✓If you are still not satisfied with the outcome, you can lodge a dispute (for free) with your Lender\’s external dispute resolution (EDR) scheme – either the Financial Ombudsman Service (FOS) 1300 780 808 or the Credit Ombudsman Service Limited (COSL) 1800 138 422. EquityVision Pty Ltd and Michele Mansfield are members of COSL.
✓Find more information from www.asic.gov.au or www.moneysmart.gov.au