It’s no secret that the cost of living is on the rise. And with that, you may find yourself struggling to meet your mortgage repayments. It can be a very stressful and overwhelming situation to find yourself in. However, there are several ways that you can get help. Here’s what you can do if you’re struggling right now.
Contact your lender
Consider this your first port of call if you’re struggling with your mortgage repayments. Contact your mortgage lender as soon as possible. They will normally write to you within 15 days of your missed payment. However, you shouldn’t leave this long to seek help. This step may seem a little scary but your lenders work with you to find a solution so don’t worry. Here are a few things they may be able to do for you:
- Temporary payment arrangements
- Increasing your mortgage term to reduce your monthly payments
- Deferring a payment
- Switching to just paying interest only
- Switching to a cheaper mortgage
- Reduce your monthly interest payments
- Take a payment holiday
Taking a payment holiday means having a break from paying your mortgage for a few months. This could be a good option for you if you’ve had a sharp drop in income or you’ve been made redundant.
You’ll still be charged interest during this period and you’ll need to be sure you catch up with these payments before your mortgage terms end. But, a payment holiday is a great way to create some breathing space for a few months.
Be warned though, that not all lenders or mortgage products offer a payment holiday. Often, in order for you to qualify, you’ll need to have previously overpaid on your mortgage. If you think you have overpaid in the past, speak to your lender as soon as possible.
- Extend mortgage term
A mortgage term is a total period over which you make your repayments. Spreading your debt over a longer period will reduce your monthly payments. This could be a good option to take if your income has dropped or if your bills have increased.
On the upside, you’ll continue to repay your mortgage. On the downside, increasing your term will increase the total amount of interest you pay overall.
Budgeting is one of the most effective ways to help with money troubles. And it’s a good first step if you’re paying off any mortgage arrears.
Sit down and work out your income and your outgoings. If you’re tech-savvy, create a monthly spreadsheet. Look for areas where you make some cutbacks on any unnecessary spending like takeaways and certain subscriptions. Anything left over you put towards paying off your arrears. Every little bit you can save will help.
- Change to an interest-only mortgage
One way to dramatically reduce your monthly repayments is to switch to an interest-only mortgage.
This could be a good short-term option as you’ll only be paying the interest on your loan each month.
However, you’ll need to keep in mind that this is not a long-term solution. You won’t be reducing the overall amount that you owe and you’ll still need to find a way to repay your mortgage in the long run.
- Sell your home
This may be your final solution if you’re out of other options. Be sure to get financial advice first as there may still be another option to look into.
Selling your home could give you a lump sum of money which could help to pay off your mortgage. Be sure to get a valuation on your property first. This will help you gauge whether the selling price is enough to help cover your mortgage and any related debts you’ve incurred.
In the event that the sale price is not enough, you’ll need to negotiate with your lender. There’s a chance they may not be prepared to release your property for sale.
- Schemes that can help
If you’re based in England then you may be able to receive help from the government’s Support for Mortgage Interest (SMI) scheme. A good option if your mortgage repayments are in arrears.
You’ll need to be in receipt of or qualify for benefits such as Universal credit in order to obtain SMI.
The scheme could help you pay interest on up to £200,000 of your mortgage. Payments are made directly to your mortgage lender. However, it will only cover the interest and will not pay the capital of your loan. And it’s paid as a loan which you will have to repay plus interest at a later date.
It’s worth noting that the Mortgage Rescue Scheme is no longer available in England.
If you’re based in Scotland and facing difficulties repaying your mortgage there are two schemes available to you.
The Scottish government offers two Home Owners’ Support funds.
Mortgage to shared equity– In this scheme, the Scottish government buys a stake in your property allowing you to reduce your secured loan(s)
Mortgage to Rent – This scheme allows a social landlord to buy your home and you can continue to live there as a tenant.
For those living in Wales, Support for Mortgage Interest is also available. Local authorities and housing associations also operate Mortgage Rescue Schemes.
For residents in Northern Ireland, you can also seek help with your repayments from the Support for Mortgage Interest.
- Help from Charities
There are also a number of charities at hand to help if you can’t find an option that suits your situation. These include:
- Citizens Advice
- National Debtline
You may also be able to speak with your local council.
The cost of living is on the rise and it’s an incredibly stressful time for most of us. But remember, you’re not alone and there is help out there for you if you’re struggling.
If you do find yourself struggling, don’t put off making an appointment with your lender. They’re there to help during this time of uncertainty.
If you decide to sell your home and need help from a specialist team please don’t hesitate to contact the friendly team at Sell House Fast Liverpool today.