If you are struggling with your mortgage repayments or worried about losing your home completely you may be tempted to ignore the situation and hope it will go away. Under no circumstances do this. This is what you can do and where you can find the help and support you need.
Contact Your Mortgage Lender As Soon As Possible
Don’t be afraid to contact your mortgage lender as they will be keen to help you and advise on the options you have available. As your provider they must make a reasonable number of attempts to come to an arrangement with you or change the way you make the mortgage repayments or when you make them.
If you fall into arrears within 2 weeks, your mortgage lender must do the following :
- Give you a list of all the monthly mortgage repayments that you have missed.
- Tell you the total amount of money owed as a result of missing the mortgage repayments.
- Let you know the total amount of money outstanding under your current mortgage arrangement.
- They must give you a reasonable time period to resolve any shortfall.
- Your mortgage lender must tell you the amount of any charges that have been incurred as a result of missing the mortgage repayments. You can also use a repayment calculator.
Only if all reasonable offers have failed to resolve the situation your mortgage lender could seek means of repossession. And even then, they must give you a reasonable amount of notice before such action takes place.
You Might Have Insurance Cover to Help with The Monthly Payments
Mortgage Payment Protection Insurance can assist you with your mortgage repayments if you monthly income has decreased due to accident, sickness or redundancy. Make sure that you look through any paperwork you have as you might have taken it out when you first got you mortgage. You can also contact your mortgage lender to double check whether you have it or not.
Live by a Budget and Cut Your Spending
It’s important to spend some time analysing your spending habits to see if there are any areas where you can be saving money no matter how little it is. Have a look through your outgoings and compare it to what you have coming in and then decide what you deem as non-essential and essential items. This can be done by simply looking at your current account using online banking. Cutting down your spending you will give you extra money that you can put towards your mortgage repayments. Don’t fall into the trap of using your credit card.
If You Are Struggling You Need to Speak Up
As well as talking to your mortgage lender you can also get advice from many different debt advice organisations and charities. An experienced money advisor will be able to give you free and impartial advice about your debt and also if you struggling emotionally as a result of it.
It’s Worth Checking If You Can Get Financial Help
Depending on your current circumstances you might qualify for certain benefits or help from the government. You can use the benefit calculator on GOV.UK to find out more and whether you qualify for such benefits. Its also good to use a mortgage repayment calculator.
Selling Your Home as a Very Last Resort
Yes, it’s a sad situation to be in and a very big decision to make. But if you know that your financial situation won’t be changing for the long term then you need to consider selling and moving home and relocating to a cheaper property or start renting instead. If you are considering selling your home then ask your mortgage lender if you can stay in the property until you manage to sell it. But, make sure that you have a stable place to live before moving home.
These Are the Things That You Should Avoid Doing
It’s important to stress that if you are considering doing any of the following then seek the advice from a debt organisation before you take any action.
Selling Your Property Without Sourcing A New Place to Live
If your local council think that you have made yourself homeless on purpose then they might not help you find a place to live.
Taking Out More Loans to Pay Off Your Debts
Taking out additional loans can cost you more money as they are generally very expensive especially pay day loans. Don’t be tempted to apply for a new credit card whether it’s at a fixed rate or not as its only going to cost you more money in the long run.
Giving Back the Keys to Your Property
Even if you are in debt and your mortgage is in arrears you are still responsible for the mortgage repayments before your property is sold. You may also be responsible for the outstanding balance if the amount raised by selling you home isn’t enough to cover the mortgage repayments that is owed to the lender. Again, it’s a good idea to use a mortgage calculator to completely work out your finances and how much selling your property will help you.