I see more and more people getting caught out with the changes happening in their lives. Gone are the days of company loyalty, they can pull the plug on your perceived job security any day. It doesn’t matter whether you are an employee, contractor or agency contractor these days. I touched base on the importance of planning ahead, budgets help you do that. But what if you just started your plan and do not yet have a buffer?
Be prepared to face your problem!
Banks expect that you may have changes to your circumstances. Some even offer packages designed for such periods. So if you hit hard times, make sure you give them a call as soon as you can to negotiate a deal. When you do make sure you are prepared!
Firstly, make the first step in getting a new arrangement. Don’t let the bank chase you. No doubt they will have guidelines within which an arrangement can be made based on your circumstances, but at least you are prepared to face your situation head on. Don’t appear beaten and downtrodden when you go into your negotiations. Stay calm and rational.
When you present your case, make sure you are prepared. Don’t just say “i can’t afford it!’. Let them know the situation that got you in trouble, lost your job, had you hours cut back, unexpected changes are not cause for alarm to a lender. If you are up front and prepared you can put the bank at ease.
Your situation may be as simple as to change to an interest only loan. This is not just for investors, it is for all home owners. If that doesn’t give you enough of a break then you may have to dig down deeper.
Set out the deal as you see it. How much can you pay, how often. Give them supporting documents to further support your case. In effect you are negotiating a new loan, as everything you provided initially has changed. so provide them market information, appraisal from an agent, payslips, rental appraisal in case you need to move out. Anything that supports your situation will be useful.
Outline the benefit to the bank. They are not your friend. Don’t think for a moment that they are there to really help you. They are there to ensure you keep paying, it is much easier than try to repossess your property. So show them how the deal is beneficial to them. So give info in support, but don’t give away too much.
If it still doesn’t give you the desired effect, you may need to sell. It is better that you do this on your term! Don’t lose control or you may end up with a hefty legal bill after you have sold everything. With this in light you may be able to negotiate to hold off on making repayment for part of the period your property is on the market. But remember, if you do this, you end up paying higher interest. Weigh up if this works for you.
Dealing with debt can seem overwhelming! So remember, as long as you stay in control and managing your situation, you are doing well!
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