How To Save Your Home

Posted on March 25, 2008 by | 1 Comment

Peter Mericka B.A., LL.B


 


 


 


 





 


by Neil Jenman


The word ‘mortgage’ is French in origin. It means to make a pledge upon which your life depends – or, literally, an agreement until death.
In today’s debt heavy world a mortgage really has one of two meanings. Either you destroy (kill) it or it destroys (kills) you.


Around one million Australians are now suffering the most talked-about ‘material disease’ of today – mortgage stress. The symptom of mortgage stress is a mortgage payment which is more than thirty per cent of your net income.


So, if you earn a thousand dollars a week and the repayments on your home are more than three hundred dollars a week, you’re officially stressed.


But a repayment of three hundred dollars a week means you’d have a loan of around $150,000 which means you’d probably be living near Oodnadatta or Gulargambone.


If you bought a Sydney home for around $500,000 and you got a loan of $400,000 your payments would be around $3,400 per month. To avoid mortgage stress you’d have to be earning around $200,000 a year. And, unless you’re a cleaner at Macquarie Bank you’re not likely to be earning anything near $200,000.


Today, for hundreds of thousands of borrowers, repayments have gone way past the stress level of 30 per cent. It’s not uncommon to hear of people paying 50 per cent of their income towards their mortgages.


It’s even being reported that, in some Sydney suburbs, repayments are taking 70 per cent (that’s right ‘seventy’ per cent) of people’s incomes.


That’s not mortgage stress, that’s mortgage trauma.


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1 Comment

  • In these difficult times, many are struggling to make ends meet and many others are finding it hard to meet mortgage payments and are being forced to consider selling.

    It would be good to hear from Mr Jenman his opinions on how people can avoid being ripped-off by rogue agents looking to make a quick buck at the expense of a family desperate and with its back to the wall – especially agents who consciously misrepresent their credentials and indicate they are part of an ethical group of real estate agents when in fact they are not ????

    Our experiences are clearly laid out here: http://realestatelies.blogspot.com/

    And after six months we are still waiting for a reply…

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