Interest Rate Pressure

The recent move by the Reserve Bank of Australia to increase interest rates for the 12th consecutive time, pushing the average standard variable rate to 9.25 per cent has placed pressure on a lot of home owners who currently have their property listed on the market.

The natural instinct of property owners who can’t afford increased mortgage repayments is to reduce the price of their property in hope of a quick sale. This might seem like the only option and in some instances is the correct solution, but before you take this drastic measure make sure you have exhausted all other options.

Below is a list of things you should make sure you do to help find the extra money needed to make loan repayments while you sell your property;

• Eat in – avoid purchasing your lunch or dinner each day. Make a sandwich and take it to work and eat in more at home, this alone should cover any mortgage increases.
• Spend less money on entertainment– You can go without that movie or footy game for the next couple of months. Watch it on T.V or rent a dvd.
• Take care grocery shopping – this is one of the quickest ways to spend money. Make sure you carefully compare the price of all products you pick up in a supermarket. Cut out any unnecessary items from your grocery trolley and watch your grocery bills reduce.
• Credit cards – If you have control of your credit card you could live off this until you have sold your property but this isn’t recommended. Stop spending money on your credit card and remove it from your wallet, lock it up at home. Reduce credit card payments to the minimum amount and use any extra cash to make up the shortfall in your mortgage repayments.

If you take time to cut out unnecessary expenditure in these areas you will be amazed how much money you can find, which can be used to buy you time while you sell your property for the price you are after.

Note: All material we have discussed here is our opinion and should not be used on its own. You should seek the advice of a financial professional before you act on anything.