As we’ve seen in recent months, the cost of living keeps on going up, with bills on the rise, the cost of essential purchases going up, and having little or no savings to fall back on, people are starting to struggle. Household finances are being stretched and some families are having problems keeping up with their monthly mortgage repayments.
In this worrying time, it is essential that households who find themselves in this situation have access to the right information and advice. The rise in mortgage interest rates as of late is also adding to this stress. This will affect the majority of mortgage holders at some point in their mortgage lifetime, in one way or another, the important thing is to remember that you are not alone.
If you find yourself in this difficult situation and are unable to make your mortgage repayment, or you even think you will struggle to make payments in the coming months, despite what some people believe, letting your mortgage lender know does not mean they will automatically repossess your home.
What do I Do?
The first thing you should do is contact your lender as soon as you can. They will work with you if you are experiencing financial difficulties. Lenders, once they know there is a problem, will do everything possible within their remit to help and you are likely to have more options should you contact them before you miss a payment.
Options to help:
Common options from lenders are;
- Extending your mortgage term – Doing this will lower your monthly payments and give you a longer time to repay your mortgage. Increasing your mortgage term will also increase the amount of interest you repay on the mortgage over the lifetime of the loan so this is something important to consider should you wish to choose this option.
- Changing to an interest-only mortgage – This can be another way lenders can help reduce your monthly payments. An interest-only mortgage will lower your monthly payments but will also mean that you will owe more money when the overall mortgage term is up. You will need a plan in place as to how you will pay off the remaining balance. Switching to an interest-only mortgage may impact your ability to refinance or sell your home in the future as if interest rates rise or property values fall, you could end up owing more than you think your home is worth.
- Request a payment holiday – Another option is lenders will look to see if they are able to offer you a payment holiday. This is normally up to three months which will hopefully give you some breathing space in order to get your finances back on track. Speak to your lender first regarding this instead of just stopping paying in the short term as they will be able to advise you on the best way to proceed.
If you are looking for further help and advice it is important to contact your lender as soon as possible and not bury your head in the sand.
If you would like further advice or are looking to re-mortgage altogether, here at Agentis, we understand everyone’s circumstances are different, which is why we take the time to understand everyone’s situation and help advise you on the best mortgage to suit you. Get in touch today!
