Prepare for the worst and hope you are wrong. Plan for a recession and if it does not happen, at least you have an excellent contingency plan in place. And hey, a lot of the tips below are worthwhile to keep in place on an ongoing basis, these will improve your overall financial position and get you mortgage free, or into another property sooner!!
Please we urge you before it is too late, to get yourself into a position where financially you can withstand whatever gets thrown at you – whether that is reduced income from you or your partner, or loss of rental income due to a tenant now finding themselves unable to rent for one of the properties in your portfolio.
Now is the time to ‘top-up’ your mortgage(s) to consolidate those high interest debts and provide a cash flow buffer with a Flexi or Revolving Credit arrangement. Remember you don’t pay a cent in interest for any undrawn balances. But there will be ‘cash’ available should you need it, much like an overdraft, and all at the new (lower) floating interest rates just announced.
Refinancing back to a 25 or 30 Year Loan Term may be a wise option in many situations to reduce weekly/monthly cash going out on mortgage payments as well. This will provide you with more ‘in the hand’ so you can redirect it to other vital areas of concern. When the ‘storm is over’ you simply increase your payments back to normal when you have the capacity to do so.
Additionally, cut down on non-essential purchases. Reduce your weekly expenditure. Treat the repayments of your Mortgage with the utmost priority. Even if this means going without for a while! Your ability to refinance at a later date, even to a non-bank lender, is severely restricted if any loan payments are missed!
Remember ultimately it is the mortgage (and your ability to service this) at the end of the day that is putting the roof over your heads.
COVID-19.
I don’t want to speak at length about COVID-19 there are a lot of experts better placed to talk about this. We have been offering phone and online-based mortgages (+ insurance, KiwiSaver and finance) for 5 years. We are 100% ready, and able, to work remotely and are currently following government guidelines.
If you are in self-isolation, you need not worry, as you are still able to access our systems through the client ‘portal’ which is customised to service clients remotely and allow us to gather the necessary information and documents from you. Keep healthy!!
Income Protection & Life Insurances
Without taking advantage of ‘scare tactics’ my existing clients know I’m always a big believer in Life, Mortgage & Income protection type insurances.
All we will say is; We have had a notable increased uptake in policies for clients who were previously ‘sitting on the fence’. Coincidence? It is always better to get insurance in place before you need it!
A review and top-up of your personal risk insurances now is a very wise thing to do.
Reach out for help before it’s too late!
E: matt@mattwilloughby.co.nz
M: 02102217130
