It’s December, Christmas is near, but the festive mood is not as joyous as it should be for many. Australians have faced eight straight cash rate increases since May 2022. The joy of Christmas is fading away for mortgage holders and would-be homeowners who aren’t sure whether getting or refinancing a home loan is possible in today’s environment.
Get A Christmas Reward From Your Lender
Fortunately, Santa isn’t the only one delivering presents this year. Here are four ways you can get a Christmas reward from your lender:
- 1. Call and ask for an interest rate reduction. Your lender might be willing to work with you to retain you as a customer.
- 2. Feel free to make the switch to another lender. If you’ve found out that the current rates on your home loan could be more competitive now, prepare to switch. Refinancing is a great way to ensure your home loan works for you.
- 3. Take advantage of cashback offers for refinancing and new loans. Lenders sometimes offer as much as $6,000 cashback during these limited offers.
- 4. If Christmas spending puts you at risk of mortgage stress or default, talk to your mortgage broker or lender immediately. Financial hardship measures are in place to ensure your repayments are manageable.
Celebrate Christmas Without Breaking The Bank
If you’re applying for a home loan or want to refinance, the lender will assess your financial situation and ask for recent bank statements. They will keep a keen eye on your credit card limits, use of buy now, pay later services and even the cost of Christmas dinners and presents.
If your spending has been too frivolous during the holidays, you risk lowering your borrowing power, and the lender could deny your application.
Here are five ways you can take control of your finances this Christmas:
- 1. Organise a Christmas potluck instead of doing all the work alone. You enjoy dishes from different cultures and discover which of your loved ones are master chefs.
- 2. Your Christmas gifts can be within your budget. You can look for pre-loved or secondhand items or even visit charity shops where you can bag a bargain for a unique item.
- 3. Make a list of all your festive expenses and split them into essentials and non-essentials. Look for cheaper alternatives for your essentials and, if possible, do away with your non-essential spending.
- 4. Budgeting is a great way to keep track of your festive spending. Once you’ve created a budget, stick to it.
- 5. Try to avoid putting Christmas spending on credit. That means avoid using credit cards and buy now, pay later services. These options can hurt your credit score and borrowing power if you can’t repay them on time.
Bringing The Christmas Cheer
The outlook for 2023 is that rising interest rates and rent costs will take up a sizeable portion of your income. Even the buffer Australians had saved up during the pandemic could be exhausted over the holiday season due to inflation and higher living costs.
At Home Loan Experts, our mortgage brokers will help you get your finances in order so you can apply for a home loan or refinance at the right time. Call us on 1300 889 743 or enquire for free online.