Not being able to afford your home loan repayments is a very real predicament when you’re dealing with unexpected financial challenges. On top of what’s likely to be an already stressful situation – maybe you’ve lost your job, you’re unwell or you’ve had a breakup – the idea of falling behind on your home loan can cause many a sleepless night.
Financial assistance could provide you with temporary relief. Typically, this involves deferring some or all of your normal repayments for a limited time.
Bluestone is committed to supporting customers who require financial assistance. Here’s what you need to know.
You’ll still need to pay it back
While reducing or stopping your repayments can give you some all-important breathing room, you may pay more in the long run. If you stop repaying your loan entirely, the interest will still accrue, so your loan balance will increase. Even if you’re covering the interest each month, you’ll still need to pay off your full loan by the end of its term.
Meeting eligibility criteria
You may be eligible for financial assistance if you’re facing a temporary, unexpected shortfall in your finances. Here are some of the more common scenarios:
- Income and employment. You or your spouse have lost your job, were stood down, or have experienced a significant reduction in work hours.
- Business. Your business has seen a significant drop in revenue or has been ordered to shut down due to an unforeseen event (like COVID-19).
- Investment property. A tenant in your investment property can no longer afford to pay the rent, and you’re unable to cover your repayments.
- Unexpected illness. You or a family member became ill and can no longer work, or you have care obligations.
Financial assistance options
This is where you pay a smaller amount each month. Partial repayments enable you to cover some or all of your accrued interest. This also means your repayments will be lower, but your home loan balance will remain the same. You won’t end up with an extension on your original loan term, so later, you’ll need to pay a bit extra on top of your normal repayments to cover the shortfall.
Hone loan repayment holiday
A loan repayment holiday means you don’t pay anything towards your home loan for a set period – but interest is still charged on your home loan. You may only need to take a repayment holiday for a month, or you may need longer.
You must pay back your home loan, so you’ll need to increase your repayments once the holiday period finishes, and you’ll pay more in interest overall.
Generally, most borrowers find it best to keep paying at least a partial amount towards their home loan where possible.
Time to sell
If you find that things have changed permanently and you need to sell your home, we can help there too. A 90-day deferral will mean you pay nothing towards your loan while you sell.
The Bluestone process: what to expect
1. Initial request
Apply for financial assistance by filling out this form. Give us as much detail as you can about your current situation – it’ll help the team provide you with prompt support.
2. Financial assistance assessment
The team will contact you within 1-3 business days to conduct a short review of your finances (bank statements, income and expenses) to assess the best financial assistance option for you based on your circumstances. This includes discussing your plan to clear the missed repayments post the assistance period.
In some instances, we may ask you to provide relevant documents such as bank statements or payslips to support your application.
3. Decision and implementation
We make decisions fast! You will be notified of the decision via email. In most cases, if approved, we can implement your financial assistance within five business days from your initial contact with us, providing we have all the information we need.
4. Monthly check-ins
The plan is to get you out of your assistance program as quickly as possible. We’ll contact you a few days before the expiry of your current financial assistance period to reassess your situation – it may be that an alternative arrangement has become more appropriate.
If it turns out you can make a payment a month, you could switch from suspended to partial repayments as your situation improves. You could also gradually increase your repayments month-to-month until you’re back to full payments.
5. Once you’re back on your feet
When you’re able to make full repayments, we’ll need to work out how you repay the amount you’ve deferred. That could mean increasing your home loan repayments over a long period or making additional lump payments each month.
In some cases you may be able to capitalise the unpaid interest onto your loan. This means the unpaid interest will be added to your loan balance at the end of the financial assistance period, increasing your monthly principal payments slightly. This will also increase the amount of interest you pay over the remaining term of your loan.
It’s important to be aware that your loan term will not be extended – you will still need to repay the full amount, including the deferred amount, within your original loan term.
Getting back on track with your home loan repayments
Everyone hits a rough patch now and then – if you’re having trouble making your home loan repayments, the best thing to do is apply for financial assistance as soon as possible. At Bluestone, we independently assess each application, taking into consideration everything there is to know about your financial circumstances (not just what your bank statement says).
Then, we provide options that suit your situation – with a plan to get you back on track as soon as possible. We also move fast to ensure you don’t miss any repayments and inadvertently make things even more challenging in the long run.
Reach out to Bluestone’s financial assistance specialists today by calling 13 25 83 or apply online.