HOW TO SAVE YOUR HOME – A fight worth fighting.
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…..read more