Can I Refinance if My Current Loan is in Arrears?

Yes, it’s possible to refinance in arrears. In this situation, it’s best to find a non-bank lender that will work with you and your current financial situation. Mortgage House’s forward-thinking mindset and innovative tools allow us to offer alternative solutions if you’re experiencing financial hardship.

A mortgage that is one day late is in arrears. However, 90 days is the official arrears mark. Up to this point, the repayment is late. Falling behind on mortgage repayments demonstrates that a homeowner is experiencing a difficult financial situation. 

Only 1% of Australian mortgages fall into arrears. If it happens to you, it’s a stressful situation. You’ve reached the point where you may lose your home. 

To increase your chances of obtaining a refinance or debt consolidation, get your finances in order, mainly your credit score. You’ll need to show that this isn’t going to occur again. Speak with your lender and speak with a mortgage broker. When you refinance in arrears, it’s best to opt for an 80% loan to value ratio instead of 100%. The tactic increases your odds.

You might incur a higher interest rate, so be ready to obtain a higher repayment. If the loan is modified, you may receive a lower monthly repayment over additional years. 

Refinance in Arrears Conclusion

To refinance home loan in arrears, communicate with your original lender. You want to stop a potential auction of your home. Non-bank lenders, such as Mortgage House, work with homeowners in financial hardship. To discuss further, contact our loan specialists.