MORE Queenslanders than ever before are defaulting on their mortgages and losing their homes to the banks, caused by high interest rates and petrol pain.
State court records show the number of property repossessions has escalated in the past few months and housing experts blame rising petrol prices as much as interest rates for the spike in cases around Brisbane’s urban fringe.
Records show the number of repossessed residential and commercial properties hit a record 1019 last year and continued at the same rate – about 85 a month – until May.
But a Courier-Mail search of electronic court files has revealed the state’s Supreme and District courts handled 100 property repossession cases in June and another 83 cases by July 17, with two weeks of the month still to go.
The figures show a majority of the recently surrendered homes were in suburbs surrounding Brisbane and on the Gold Coast.
Browns Plains couple Robert and Bettina Bengtsson have to come up with a seemingly impossible sum of money within days or have their Browns Plains home repossessed.
Aged 31 and 27, with a nine-month-old baby to look after, the Bengtssons have already cashed in their super, looked for higher-paying jobs and tried to start a business.
But they are still about $14,000 behind in their mortgage payments, which they have defaulted on numerous times.
Mr Bengtsson said the nightmare started when they both lost their jobs. Mrs Bengtsson was pregnant when she lost hers.
“Everything was going great and then the company I was working for decided they were going to close down nightshift, so I took an involuntary redundancy and my wife, because she was a casual … they just said she wasn’t needed any more,” Mr Bengtsson said.
“When we first got the house it was only $437 a week, so we were paying $500 a week.
“And now it is up to about $550 a week, so it has jumped over $120 in those two years.
Bray Park, Scarborough, Narangba, Alexandra Hills, Kingston, Browns Plains and Thorneside are the top targets for repossessions in Brisbane, while Carrara, Arundel, Ormeau Hills, Currumbin, Tallebudgera Valley, Runaway Bay and Surfers Paradise were some of the affected suburbs on the Gold Coast.
National Shelter chairman Adrian Pisarski said the figures demonstrated the compounding effect of high petrol prices on already financially stressed homebuyers.
“It always seems to be in areas poorly serviced by public transport,” he said.
“People there are double-whammied. Their housing costs are going up and their transport costs are very high because they are car dependent.
“I think many households would cope with one or the other, but not both.”
Housing Industry Association chief economist Harley Dale said a higher rate of mortgage defaults was expected, given the increased burden of interest rates and petrol prices.
HIA calculations show the repayments on a $250,000 loan would have increased by $449 a month in the past three years, while the monthly cost of petrol for an average household would have risen by $150 in the same time.
It has been estimated that about 160,000 Queensland households are experiencing mortgage stress.
“There is no doubt it is a much more difficult environment out there in 2008 than it was in 2007,” Mr Dale said.
Mortgage and Finance Association Queensland president Bruce Mawson said stalled property values had exposed some stretched homebuyers, who had been in the habit of using the equity in their home loans to pay off other debts.
He urged anyone having trouble making their mortgage repayments to talk to their bank as soon as possible.
When a marriage comes to an end, it is always a tragedy. Of course the ending of the family unit and the emotional hardship for the children is the most difficult at the time of divorce. But the difficulty of separating one home into two can be challenging and tedious to say the least.
In addition to the management of the divorce, the household debt that was once shared as part of the family financial picture, must also be divided. In most joint credit contracts in Australia both parties are jointly & severally liable for the debt. So when the union splits up, the transition, from a financial point of view of your accounts separating, is not over night.
So one of the many issues to be discussed or managed is a plan on how to deal with the household debt. This is where emotions can get the better of people or a lack of awareness of not keeping up with these responsibilities in a timely fashion, that can have a NEGATIIVE IMPACT ON YOUR CREDIT FILE FOR UP TO 5 YEARS!
To put this into context, the oversight of not paying or perhaps abusing credit cards limits or trying to get one up on your ex will dog you for a considerable time after your relationship is no more.
Over the next 5 years your requirement for finance is likely to grow again through one reason or another. As a result of a dissolved relationship you will carry the poor credit burden.
Does an impaired credit rating stop you obtaining credit? No! There are various lenders who cater to these sorts of situations. However it will come with an increased cost via interest rates and alike. And in a tightening credit environment, most lenders are becoming more & more particular in who they are prepared to lend money to.
However it pays to be mindful these sorts of solutions are not for extended period of time and are usually one component of a strategy to re-engineer your financial position.
In trying address some these scenario’s it may pay to consider some of the following:
Credit Card Limits – do they need to be cancelled or the limit reduced.
Budget – for 2 households, do the books balance?
Income – what & how you receive may change – support pensions, maintenance. How lenders view these may differ dramatically. What impact is it likely to have moving forward?
Remember most loans for a couple have joint & several repayment requirements. So if one party is not making payments the responsibility will be sort from you.
While this situation is most always challenging there are ways to deal with issues ahead of time and certainly if it has already taken place there are always differing solutions to assist in managing your finance requirements in the intermediate future.
Finance Know How is one who is willing to listen and provide some options for your consideration.
