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I can't pay my mortgage - what do I do?
If you're struggling to pay your mortgage, then you need to take action fast to avoid having your house repossessed.
1. Speak to your lender and see if they can put you on a payment holiday to give you time to get back on your feet.
2. Cut back on any unnecessary spending - your mortgage should always be paid first before other expencences that aren't neccassary.
3. Re-evaluate if you can afford to live where you are for the forseeable - selling you house to move somewhere that you can live comfortably might be the best option.
In the current climate, job security is becoming more fragile across the country while some lost their jobs at the start of the pandemic. It’s a situation that no homeowner ever wants to be in, but is a risk – what do you do if you lose your job and can’t afford to pay the mortgage? We Buy Any House look into the options available to you and what steps you can take to keep yourself afloat in these difficult times.
If you miss a mortgage payment and your payments become overdue, you’ll be counted as in arrears. It’s important to know, however, that even if you fall into arrears, you can still get back on track if you take control. If you’re aware that you’re going to have trouble paying your mortgage, you should speak to your lender straight away to get a plan in place.
How long will my lender allow me to miss payments?
You will need to speak to your lender to find out what relief they can offer you, as it will differ lender to lender and also on your personal circumstances. Some lenders may be able to offer you a holiday from your payments, allowing you to stop making payments for a few months until you’re able to find another steady income and begin making payments again. If your lender can do this for you, it’s worth knowing that the interest probably won’t be paused so this will roll over and need to be paid later down the line when you pick up your payments again, along with the payments that you’ve missed.
You may also be able to start making interest-only payments on your mortgage. Again, it’s important to remember that while you’re not paying the mortgage the amount doesn’t disappear, you will need to pay it down the line. The best way to clear these payments easily is once you’re in a comfortable position to do so is overpay each month on your mortgage to clear the payments missed. This will help avoid you being in another difficult position.
Will the government pay my mortgage for me?
With the COVID-19 crisis, several mortgage lenders have allowed for payment pauses while homeowners reassess their finances. If you have lost your job and aren’t able to pay the mortgage and you’ve already had a mortgage holiday, you may need to look for other options. While the government won’t pay your mortgage, the Support for Mortgage Interest (SMI) scheme will pay the interest on your mortgage for you. This is ideal if you’re able to switch to interest-only payments for a period of time, but will give you some flexibility if not. You will still need to pay the mortgage payment each month if you’re not able to switch to interest-only payments.
What do I need to qualify for the SMI scheme?
To be eligible for SMI, you will need to be receiving some sort of income support, an income-based jobseeker’s allowance, income-based employment and support allowance, universal credit, or pension credit. If you lost your job recently and haven’t looked into the support that you qualify for, you should sign on to the benefits you can straight away. These systems are in place to help, and if you need the help, you should take what you can available. Having the interest from your mortgage paid can give you a helping hand in the right direction and add some flexibility into your income, allowing it to go further and for you to remain in your house throughout this difficult period.
How else can I pay my mortgage?
If you aren’t eligible for government help, or for some reason you’re unable to pause your mortgage payments, there are other ways that you can pay your mortgage. You can consider boosting your income in other ways, by selling items that you no longer own, starting your own business that you can make an income off of, for example making your own jewellery or wax melts which can be a very popular business venture for many and is something that you can do from home. You could also look into cutting household costs, allowing you to get more in control of your spending and doing things on a budget. Most households are surprised on the money they can save when they look at their unnecessary outgoings, so you may find you can cut back on your spending and be able to balance your outgoings.
If you’re not able to budget yourself or use one of the options that you’re presented with by your mortgage lender, it could be worth looking into getting help from a debt charity. These are charities that are set up specifically to help those in need of debt relief. If you’re eligible, you may be able to enrol on one of their schemes and get help from them. These charities include; StepChange, National Debtline or Shelter." - Aaron Cambden, Director, Fairview Estates
I can’t afford the mortgage and don’t expect this to change, what do I do?
Some homeowners find that no matter how much they juggle their outgoings, they cannot meet their monthly payments. At this point, if your income isn’t going to change and you’re not able to pay the mortgage, you may decide that selling your house is going to be the best option to avoid the risk of repossession and further debt. This is a big decision to make, and you should make sure that you’ve explored every possibility before deciding to sell as there may still be other things that you can do to ease your situation.