When Should I Consider Applying For Financial Hardship Assistance?

As a homeowner, the last thing you want is to have to apply for financial hardship assistance. But the reality is that some people will experience financial stress at some point, which often makes it difficult to keep up with their mortgage repayments.

Read on to learn more about your options if you are in financial hardship.

What is financial hardship?

If you’re struggling to pay your bills on time or keep up with your mortgage repayments, you could be experiencing financial hardship. While it can be difficult to admit that you’re struggling, it’s essential to reach out for help as soon as possible.

When bills start to pile up, it doesn’t take long for things to snowball into an even bigger issue. Therefore, it’s important to get on top of your finances quickly.

Depending on your individual situation, you may be able to work with your lender to:

• Reduce or pause your repayments for a period of time, or 
• Develop a unique plan for you to follow.

Ultimately, your lender will want to help you get back on your feet so you can get back to your regular mortgage repayments as soon as possible. 

When to apply for financial hardship assistance?

When it comes to applying for financial assistance, you’re better off getting the ball rolling sooner rather than later. If you experience any of the following situations and are struggling to make your mortgage repayments, get in touch with your lender as soon as possible to come up with a game plan. 

Here are some scenarios that could make it challenging to meet your home loan repayments: 

Loss of income

Whether you’ve been made redundant, your hours have been cut at work or your business is experiencing a downturn, you might suddenly find yourself without your regular income. When your income takes a dive, you’re often left with less money for your expenses, including your mortgage. 

If you’ve experienced a sudden loss of income for any reason and it’s affecting your ability to cover your expenses, you should contact your lender as soon as possible to arrange financial hardship assistance.

Illness or injury

If you or a family member has suffered from a severe illness or injury, it could have a significant impact on your financial stability. From increasing medical expenses to a loss of income, illness and injury can make it challenging to meet your financial obligations, including your home loan. In this instance, you may qualify for financial assistance through your bank or lender.

Divorce or separation

Going through a divorce or separation is tough at the best of times, but it can also add financial pressure, particularly if you have a mortgage to service. Whether you’re in the midst of dividing assets, you’ve lost half of a dual income or your expenses have increased, hardship assistance can provide temporary relief while you navigate through a rough patch. By applying for financial hardship, you can give yourself time to come up with a plan on how to deal with your property and your mortgage. 

Domestic violence

In any situations involving domestic violence, where a partner may have prevented you from working or you’ve suffered financial abuse, fleeing from this situation can significantly impact your financial wellbeing, leading to financial hardship. 

It’s important to reach out to your lender as soon as possible to let them know about your situation. Banks and lenders often have dedicated departments designed to help victims of domestic violence get back on their feet and manage their mortgage repayments and other financial liabilities in the interim. E.g. If you or someone you know are impacted by domestic violence, for confidential information, counselling and support we recommend calling 1800RESPECT on 1800 737 732. This is free and confidential service that isn't part of Unloan. 

Natural disasters

Australia can be known for its wild weather, from storms and bushfires to floods. If your home or property has been affected by a natural disaster, it could result in damage or loss of income, which can impact your ability to service your home loan. In this instance, you might be eligible for temporary hardship assistance to help you recover. 

Unexpected expenses 

From time to time, unexpected expenses, like major car repairs, home maintenance or medical bills, can put a strain on your finances, making it difficult to keep up with mortgage payments. Financial hardship assistance can provide relief during these situations while providing time to plan your next steps.

Whether you’re struggling due to a loss of income, injury or unexpected expenses, it’s important to apply for financial hardship assistance with your bank or lender as soon as possible. That way you can work together to come up with a suitable solution and prevent yourself from facing a bigger problem down the track. 

When you take out a mortgage with Unloan, you can count on us to be there when the going gets tough. If you’re struggling to keep up with your mortgage repayments, it’s important to reach out as soon as possible. Depending on your situation, we may ask for the following supporting documentation to help us understand your circumstances:

• Income statements,
• Previous/ongoing expenses,
• A medical certificate, or
• An employment separation certificate. 

We’ll work with you to provide the best solution possible. Get in touch with us via email or phone to chat about your situation and get the ball rolling on a solution. In the meantime, you may want to explore our list of external support services if you’re in need of an extra helping hand.

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This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.

Unloan is a division of Commonwealth Bank of Australia. 

‍Applications are subject to credit approval; satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000.  

‍Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan. 

‍There are no fees from Unloan. However, there are some mandatory Government costs depending on your state when switching your home loan. For convenience, Unloan adds this amount to the loan balance on settlement. 

* Other third-party fees may apply. Government charges may apply. Your other lender may charge an exit fee when refinancing.

If you need support, please visit our important links to vulnerable customers, which can assist customers impacted by family bereavement.