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Can I get help paying my mortgage?
If you're struggling to make your monthly mortgage payments, there are options for you. Speak to your lender and see if they will be willing to give you a holiday, allowing you to pause your payments and start paying them when you have a more stable income. You may qualify for SMI, but you will need to already be on certain benefits for this.
The past few months have been lifechanging for everyone, but some have struggled more than others. With unemployment on the rise and life still in uncertain times, some homeowners have faced trouble when it comes to paying their mortgage. If you’ve found yourself struggling with finances, we’re here to help.
If you’ve recently lost your job, or your income has reduced and left you struggling, you should speak to your lender immediately to make them aware of the issues that you’re dealing with. Lenders tend to be fairly flexible as it’s easier for them to give you some time to recover and get your finances back in order, but you will need to make sure that you speak to them and make sure that’s the case. If you are struggling to make your payments but don’t tell your lender, you run the risk of repossession down the line. It’s always best to deal with the problem straight away, as your lender should work with you to find a solution.
What can my lender do?
This will differ lender to lender, so you will need to speak to your specific lender and find out what help they can offer you. In general, lenders have a few options that they can offer you, but it will depend on what your relationship is with them – if you’ve had lots of late payments previously, they might be less inclined to give you as much flexibility. Some lenders will be able to offer you a mortgage holiday, which is usually for three months, giving you time to find another income and get back on your feet. Bear in mind that if your lender is willing to do this, it’s a pause on your payments. You will still need to pay this money back before the end of your mortgage term, including the interest. If you’re able to take a mortgage holiday, once you’re back in a more secure position and start repaying, it’s a good idea to overpay for a few months to help clear some of the build-ups from the pause, to make sure you don’t struggle with the amount at the end of the term.
Some lenders will also allow you to make interest-only payments for a few months, giving you more flexibility with your income each month. This can make a huge difference, and provide you with time to find another way to increase your income. Again, this period will just push your mortgage payments back rather than clearing them, so you will still need to pay the full amount later down the line. This is why it’s always a good idea to make overpayments when you’re in a position to, to get back on top of your payments and avoid a large payment at the end.
You may also have the option of extending your mortgage agreement, spreading out the cost and reducing your monthly payments. This can be a really great option for homeowners that have had a decrease in their income but are still able to pay something towards their monthly mortgage cost. This will depend on your current mortgage term – and don’t forget that it will increase your interest, so you’ll pay more long-term.
I’m in arrears, can I still get help?
If you’ve already fallen behind on your payments, there are still options for you. You may have already received a letter from your lender addressing these late payments – if you have, make sure that you respond and let them know what your situation is. Especially with the pandemic, lenders are more forgiving of homeowners in difficult situations, and they will do what they can to help you get back on track.
There is support in place to help those struggling with their mortgage, such as SMI, Support for Mortgage Interest. You will need to be on certain benefits to qualify for SMI, and it will only pay your interest, not the mortgage itself. If you don’t qualify for this support, you may want to look into other ways to support yourself – if you’ve lost your job, you can apply to agencies to find work quickly, or you may have savings that you can rely on while you find other means of work.
Will my lender repossess my house?
The repossession process can take up to 9 months, and lenders will do what they can to avoid going down this path wherever possible. Repossession is the last resort, where lenders have had no success negotiating with you and feel that there is no other way to get the money that you owe. If you talk to your lender and make an effort to prove that you’re trying to make your payments, they’re much more likely to give you the time you need to get back on track. If you don’t show the effort and don’t reply to their messages notifying them of your situation, you run the risk of a repossession order.
I’m being threatened with repossession, what do I do?
Through the repossession process, there are still plenty of opportunities for you to make peace with your lender and stop the process. If you’ve had no luck in this, or you’re fully aware that you’re not going to be able to make your mortgage payments for quite some time due to a change of circumstances, you might want to consider selling your house. If you get repossessed, it will stay on your credit file for years and will ruin your credit score. Selling your house and paying your mortgage lender what you owe them in full will avoid this damage, meaning that when you’re in a stronger position, you can reapply for another mortgage. After being repossessed, applying for a mortgage is an incredibly hard process as many lenders will refuse you based on your past. Often, taking matters into your own hands and selling yourself will put you in a stronger position in the future, and is what lots of homeowners do to avoid the damage and trauma of a repossession.