Mortgage Advice

Many people are beginning to feel a squeeze on their money as financial times become harder. So it’s really important to keep an eye on your finances so it doesn’t get out of hand and puts your home at risk from repossession.

Where should you start?

• It now might be a good time to sit down and make an honest view of your finances and decide on whether there is a problem. Ignoring it won’t make it go away. Consider how you might be able to reduce your monthly spending – be honest with yourself about the things you can really live without. Work out a realistic budget and make every effort to try and keep to it. Consider negotiating with your creditors to reduce your monthly payments. For example; utility bills and credit cards.

What if you can’t afford your mortgage payment?

• Make your mortgage payments your top priority and pay them ahead of non-priority debts and unsecured loans. If you have any concerns that you might not be able to pay your mortgage or could struggle, you should speak to your mortgage lender as soon as possible. They are more likely to help if they are kept informed. To keep your home you must keep your payments going. Show that you are willing by paying what you can and tell your lender why you are only able to afford this much. Maximize your income – if you have a spare room consider a lodger, make a claim for benefits. If you cannot pay anything at all – don’t panic – but contact your lender and let them know what’s going on. There are options available that your lender might agree to put in place to help you keep your home. Don't worry about talking to your lender about your mortgage. Courts will now expect lenders to demonstrate that they are working harder with their borrowers to try to resolve mortgage arrears in order to make repossession a last resort. This is known as the Mortgage Pre-action Protocol.

What else can your lender do to help?

• You need to be aware that any changes that you make to your mortgage might result in charges over the longer term such as interest. Agree to change or lengthen the term of your mortgage loan Accept reduced payments from you in the short term Add the arrears to the amount you borrowed Allow you time to sell. If you settle for this option you need to consider carefully where you will live instead. You should contact your local authority for your housing options. Ask for them to cut the charges they make to you for being in debt with your mortgage. Any arrangement you make might be for the shorter term. You will need to keep your lender up to date with any changes in your circumstances. Avoid signing up for property schemes that appear too good to be true as they probably are.