What happens if I can’t afford my mortgage?

What happens if I can't afford my mortgage?

With mortgage rates increasing dramatically over the past year many people are beginning to struggle to meet their monthly mortgage repayments. This being the case it’s important to realise that there is mortgage support out there, not just from your lender but from other sources like charities and government support.

The most important thing is that you seek mortgage support as soon as possible before the situation becomes too serious and before you start to get into mortgage arrears.

How to afford a mortgage

The most important thing you can do prior to taking a mortgage is to ensure that you can afford it in advance.

You can do this in a number of ways:

  • Run through various affordability calculators – there are many of these available online via lender websites and other financial sites. This will give you a good indication of both how much you can afford and how much it will cost you.
  • Make sure you have assessed your monthly outgoings as realistically as possible to allow for any increases in bills and living expenses.
  • Try and save as much as possible both prior to and after you have purchased a property with a mortgage in order to have an Emergency Fund should anything go wrong.

How to pay your mortgage

How to pay your mortgage when interest rates and living expenses are increasing is becoming a major problem for many homeowners.

If you are beginning to face problems with how to pay your mortgage, it’s important that you take action as soon as possible to ensure the situation doesn’t get worse. It is important that you contact your lender as soon as possible if you are having issues with how to pay your mortgage. Lenders are obligated to do as much as possible to assist you, and the sooner you contact them, the better.

There are a number of options you may wish to consider:

  • Switch to an interest-only mortgage for a certain period.
  • If you have gone into arrears already they will generally offer a payment plan to help you clear these arrears. Make sure you stick to this.
  • Your lender may agree to a Payment Holiday, usually up to a period of 6 months in order to help you through a period of payment difficulty. It’s important that this is agreed in advance with the lender. You need to be aware that these payments won’t be waived but will effectively be added to your mortgage.
  • Seek additional income – Find additional ways of generating extra income, a second job, selling personal items such as jewellery, electronic items etc will help you generate extra income.
  • Check if you are eligible for government support.
  • Seek independent advice from charities, and private organisations.
  • Ultimately if you are unable to pay your mortgage you may need to consider selling your home before the lender repossesses your home.
  • Contact a mortgage broker like Goldmanread to discuss your options.

How can I get help with mortgage payments from my lender?

When you approach your lender asking for Mortgage Support it is important to communicate with them as clearly as possible.

Below are a few tips for how to ask for mortgage support from your lender:

  • Contact your lender as soon as possible.
  • Be fully prepared prior to talking with your lender. Have all of the relevant financial information to hand – statements, payslips , Budgets etc.
  • Be as clear and honest as possible as to why you find yourself in this difficult situation – Lenders want to help.
  • Ask the lender to set out the specific options open to help you. Don’t be vague about what you to discuss. Agree the way forward with timeframes and objectives.
  • Both negotiate and compromise with your lender so you can reach a workable solution which is practical for both of you.
  • Communicate – Make sure you keep your lender fully updated at all times on your progress, this will demonstrate your commitment to working through your financial difficulties.

Are there government support schemes to help with mortgage payments?

There are various government schemes that can help if you can’t pay your mortgage. These include the following:

You may be eligible for government benefits specifically aimed at those who have run into difficulties paying their mortgage. These include:

  • Support for Mortgage Interest (SMI): This is aimed at those on a low income and who are already claiming certain benefits. It is aimed at assisting people meet the interest payments on their mortgage
  • Housing Benefit – This is generally aimed at those who pay rent and aims to assist those on a low income meet their rent payments. It can also be used in certain circumstances, to help with mortgage payments. The particular circumstances vary but include help for the disabled or those with dependent children.
  • Universal Credit – This is a Means Tested benefit aimed at helping those on low income meet their mortgage payments.

Seek assistance from Private Organisations/Charities – These organisations include the following:

  • National Debt Line – Provides free debt advice for those struggling to pay their mortgage. In addition it has many useful resources that you can use to help yourself in negotiations with lenders.
  • Citizens Advice – Provides free information and resources to those struggling financially.
    As stated above most lenders in the UK are sympathetic for those in genuine need of help when they are having financial difficulties. It’s important that you let your lender know as soon as you are starting to struggle and need Mortgage Support.
Picture of Clive Read
Clive Read

Clive Read is an appointed representative of PRIMIS Mortgage Network. PRIMIS Mortgage Network is a trading style of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority.

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