Homeowners told not to panic in the face of negative stocks and rising mortgage rates

Financial experts say homeowners shouldn’t panic in the face of negative stocks and rising mortgage rates.

This week, the Reserve Bank issued a warning about negative stocks as house prices fall and interest rates rise in the face of inflation.

Katie Wesney, financial advisor at Enable Me, said the headlines about negative stocks and high interest rates are terrifying, but only a small percentage of people are affected.

“Generally speaking, it’s the first homebuyers who happened to buy homes at the peak of last year, and that’s a cold comfort to those folks, but we have to put that in context.” she said.

Loan Market mortgage broker Paulette Trotter says property prices will recover to what they were after the global financial crisis.

She advised people with negative equity not to sell unless they had to.

“Your property will grow in value over time,” she said.

But if you need to sell or increase your lending, that’s when the “value” comes in, said Chris Greig, head of housing and investment products at Kiwibank.

“I think people have to think about whether it’s the right thing for them and why they’re in a position to do it.

For people facing financial hardship due to high interest rates, as long as customers consult their banks early on, they can usually “assist and help” people through the situation they find themselves in, he said. said.

If people are nervous about raising interest rates ahead of a mortgage review, Trotter recommended “consider affordability now.”

She said that by seeing where they can cut now, they can make changes and save money before having to take higher interest rates.

Wesney said people need to be “purposeful” in their spending.

For those of you who don’t know where to start, we recommend printing your last three months of bank statements to see where your money is going.

Then you can explore which “discretionary spending” you can cut.

Wesney says things like taking less take-out coffee, going to the supermarket once a week instead of multiple trips, and not using credit cards can all make a difference.