As a mortgage broker in Australia, it is important to understand the impact of interest rates on your lower income clients. Lower income earners often struggle to keep up with mortgage payments, especially when interest rates rise. This can result in missed payments, default, and even foreclosure.
Here are some key points to consider when working with lower income clients:
- Affordability: Make sure that the mortgage your client has taken out is affordable or is still affordable, based on their income and other expenses.
- Fixed vs. Variable Interest Rates: Fixed interest rates offer stability and predictability for lower income earners. However, variable interest rates may offer lower initial rates, but the interest rate can also go up and become unaffordable. Help your client weigh the pros and cons of each option.
- Government Assistance Schemes Available in 2023:
| Details | Help To Buy | Regional First Home Buyer Support Scheme | First Home Guarantee | Family Home Guarantee |
| What is it? | It is a shared equity scheme where the government contributes 40% for new builds and 30% for existing properties. | It is a guarantor scheme where the government guarantees loans so borrowers avoid LMI. | It is a guarantor scheme where the government guarantees loans so borrowers avoid LMI. | It is a guarantor scheme where the government guarantees loans so borrowers avoid LMI. |
| Who’s it for? | Low- to middle-income earners who currently don’t own property | Only first home buyers who already live in regional areas | Only for first home buyers | Single parents with at least one child dependant |
| How many places are available? | 10,000 each year | 10,000 each year | 35,000 each year | 5,000 each year |
| What is the minimum deposit required? | 2% | 5% | 5% | 2% |
| What is the income cap? | $90,000 for singles and $120,000 for couples | $125,000 for singles and $200,000 for couples | $125,000 for singles and $200,000 for couples | $125,000 |
| When is it available? | 1 July 2023 | 1 January 2023 | Available now. Extra places are available from 1 July 2022 | Available now |
By taking advantage of government assistance programs, Australian mortgage brokers can help lower income clients achieve their dream of homeownership. With a focus on affordability, budgeting, and finding the right loan product, you can help your clients make informed decisions that set them up for success.
- Refinancing Options: If interest rates continue to rise and your client is struggling to make payments, consider refinancing options. Refinancing can result in lower monthly payments, but it may also result in longer loan terms and higher overall interest costs.
- Budgeting: Lower income clients may benefit from budgeting support and financial counselling. Encourage them to seek out these resources and make a plan to manage their finances effectively.
By keeping these points in mind, you can help your lower income clients navigate the mortgage process and find a solution that works for them. By taking the time to understand their unique needs and challenges, you can provide valuable guidance and support as they work towards achieving their financial goals.
If your client is struggling with their mortgage repayments or other loan repayments, the team at Solve My Debt Now can assist in several ways, including:
– Setting up payment plans your client can afford instead of what they are currently required to pay under their credit contracts
– Freezing or reducing interest and fees on your clients debts
– Reducing or completely waiving your clients debt
– If your client has lump sums they can put towards their debt, negotiating debt settlements for them.
This option is not a Part 9 debt agreement or bankruptcy. It therefore does not put a 5-year negative mark on your client’s credit file.
If your client requires confidential debt help or credit file repair in order to get a loan approved, contact the team who have been in the business since 2009, Princeville Credit Advocates, on 1300 93 63 63 or email help@princeville.com.au
If you have clients who need assistance with credit repair, don’t hesitate to contact Princeville Credit Advocates.
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