The unescapable mortgage stress & 30 percent rule
Its a dream of every people living residing in Australia to get their own home. Endless bills, fewer savings, more expenses make it difficult to purchase your dream property, but banks assist you financially. The banks are always willing to give flexibility to their clients; they happily release the required sum but is the amount suitable for the repayment prospect? Ignoring the consequences of the mortgage before taking up a loan can financially drain you and set you in financial trouble.
Financial advisor, Kyle Frost, Australians are slightly interested in spending chunky amounts on their holiday instead of planning to purchase the property. The stressing moment often encourages the purchaser to make a poor decision.
Consequences of messy mortgage
The key reason for a ruined relationship and mental hardship is financial stress. According to the report released by abc.net.au, Australians struggling to meet mortgage payment has low mental health and high psychological pressure. The unmanageable stress emotionally and mentally drains them making them ruin their relationship with their closed ones.
The Australian property market is too competitive that most of the people get left with no options besides taking a mortgage. If you have parents to support you, then you surely are lucky enough. Even if you get a decent property, you are left with no option of spending more than 30 percent of income in mortgage repayments.
People with dependent members struggle to keep up with the aspect. From kids schooling to their health care expenses, dependent parents, and their needs, an individual is left with no option alongside putting everything in the mortgage.
Brainstorm to avoid mortgage stress
Prepare a budget – List out your income, your weekly expenses, and only you can get a clear idea of the remaining amount for mortgage repayment.
Contingencies & changes in budget – Once you grip the basic budget idea, you can play around the inputs. If you are planning to extend your family, then it’s evident for you to incur changes in finance. Once you segregate the budget, you will have an idea of debt endurance.
Unemployment – Any income protection plan? Sufficient savings? If yes and are comfortable in taking more massive debt, then there is no harm. if you don’t have one prepare for it before getting a comfortable mortgage.
If you are planning to buy property in Australia, do keep a check your earnings, your gross income, and a reliable account of your expense, including the contingent liability that may occur shortly. Buying a property is a big decision indeed, and it does require financial support from the banks. But it is in your hand how pro-actively you manage your earnings to keep your mortgage under check.