Refinancing and how it can assist landlords

The current Coronavirus (COVID-19) situation and potential impacts on tenants and their ability to make rental payments may put some landlords in stressful situations around cashflow. 

Recently, Prime Minister Scott Morrison announced a moratorium on eviction for non-payment of rent for a period of six months, where the renter is in financial hardship and unable to pay rent.

Each state and territory has different legislation so you should check in with your property manager around your rights and what to do if you are in this situation. For example, LJ Hooker real estate has recently updated the property management teams within each office so they are well equipped to support their landlords and tenants during this time.

You can also find out more and keep up to date with recent COVID-19 policies via www.australia.gov.au

If I need to work with my tenant short term with no or reduced rent how can I help my own cashflow situation?

Firstly, check in with your accountant or property manager on what Government support packages are available to you. This may include tax incentives and support payments.

Lenders also have the ability to potentially offer you a “repayment pause” which may allow you to not make mortgage payments on your investment home loan for up to 6 months. 

A home loan refinance may also assist you as it can provide a lending restructure and possibly a reduced interest rate that lowers your mortgage repayments.

We’ve put together 7 reasons why a home loan refinance may be worth considering.

  • It will connect you with a professional lending specialist who will do a full review of your position and provide options that are suitable for your circumstances
  • During any discussion a lending specialist can also guide you on whether approaching your current lender for a “repayment pause” may be the best option for you, and what your position may then look like in 3-6 months
  • A plan to help you if you’re ok now but feel your circumstances may change. This may help put your mind at ease and assist with tenant discussions and negotiations
  • Assessment of your current redraw and equity position as restructuring your loan to free up equity may come in handy at some point. And you don’t need to pay interest on any increased home loan limits you don’t use
  • If you’re self-employed your situation may be more complicated as cashflow uncertainty may mean you need a more in depth analysis. Alt Doc home loan options may suit you short term and a lending specialist will guide you on options
  • Lower repayments. Simply put a reduced interest rate should lower your overall loan repayments and money back in your pocket is always better! 
  • Debt consolidation. It may be the right time to look at consolidating some or all of your personal debts to potentially lower your overall monthly commitments and help you budget easier

All up, a quick web or phone based chat with a lending specialist can put your mind at ease and help you understand your options around refinancing.

We’re isolation proof

At LJ Hooker Home Loans our fully licenced lending specialists are well equipped to assist you at any time – anywhere. You don’t need to worry about meeting us face to face during this time as our team can work with you remotely using our mobile or web services. We even have some home loans where certain loan documents and contracts can be signed electronically.

You can focus on your finances – whilst staying safe at the same time.

We hope you found this article helpful. If you'd like to discuss it further please fill in the form below and we'll be in touch.

It’s important you consider your own personal circumstances when applying for a home loan. Credit criteria applies to any loan application subject to any potential loan offer being suitable for your personal circumstances. Fees and charges, terms and conditions apply.