Housing Debt

Whether you are renting or own your home, housing-related debt can come in many forms and can negatively impact on your standard of living. The following tips will help you in both the rental and home ownership scenarios.

Rental

• If you are starting a new tenancy then you may qualify for government assistance to help with your initial rent and bond.
  
• Under the new Tenancy Act (enforced in NSW as from January 31, 2011) bonds can now be paid in instalments.
• If your current rent is too high, consider finding accommodation that is more affordable and within your means.
  
• Consider applying for community housing, government housing or the government subsidised private rental scheme (available specifically for PLWHA). These options will mean that you only pay a quarter of your income in rent (you will need to be in the low income bracket to be eligible).
• If you are behind in rent try to negotiate a repayment plan with your landlord. Under the new Tenancy Act, any reasonable plan needs to be accepted.
• Obtain a Centrelink no-interest cash advance and pay the rent in arrears.
• If you are being charged water usage, keep in mind that the landlord now has to bill you every three months, rather than deducting the accumulated total from the bond when you vacate. The landlord is also now required to install water-saving devices.
• When it comes to home contents insurance, shop around for a low premium, pay monthly and elect a higher excess amount. Be realistic as to the value of your contents and check to see whether the policy is for new items or for replacement of old ones. Also check to see whether discounts are available to people receiving Centrelink benefits.

Home Ownership

Mortgage

If you are struggling to meet mortgage payments, negotiate with your lender to restructure your mortgage to either increase the length of the term or change to an interest-only loan. Either option will see the monthly payments reduced.

• Have your transaction account offset against your mortgage account.
• Look at renting out a spare room, if you have one available.
• Consider selling the property and downsize to a more affordable one.

For short-term relief, Housing NSW can provide up to $20,000 in mortgage assistance for a maximum period of one year.

Other Related Costs

• If you are behind with the levies for your apartment, negotiate a payment plan with the body corporate. The same strategy applies to arrears of council rates.
• Shop around for a lower building and contents insurance policy.
• Don’t forget to budget for ongoing maintenance.