I’m a debt expert – six things you need to do NOW if you’re struggling with your mortgage

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With the rising cost of living, more people than ever are struggling to pay their bills every month.

But what if you can’t pay your mortgage,

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If you think you won’t be able to pay your mortgage, ask your lender for help.credit: getty

Going into mortgage arrears is very serious.

If you can’t pay off the loan you borrowed to buy your home, the lender who gave you that money eventually has the right. find Your property for the recovery of your property.

But they cannot do so until all reasonable efforts to resolve the situation have failed, according to the Financial Conduct Authority.

If you think there may be a conflict next month, the key is to act now, said Paul Broadhead, head of mortgage policy. Building Society Association (BSA).

BSA and Money Advice Trust have produced a new booklet Offering guidance on what to do if you can’t pay your mortgage, or think you might struggle to make your payments in the coming months.

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Paul said lenders are very sensitive to the growing number of people squeezed household budgetAnd if they know there is a problem they will do everything possible to help.

Here’s his advice:

Contact your lender early

As soon as you think you’ll have a problem with your monthly mortgage repayments – whether you can’t pay anything, can’t pay all of your monthly payments, or can’t make payments on time – get in touch with your friends. lender Straight away, said Paul.

The sooner you start talking to each other, the more likely you are to find a solution.

“It’s really hard for people to face the fact that they might not be able to payment,” They said.

“I think people stick their heads in the sand, and then the situation gets worse, and then it’s really difficult for people to pick up the phone and say, Look, I’m struggling.

“But if you connect with your mortgage lender, they have more options to help you.”

The same applies when your lender contacts you – don’t ignore them, instead pick up the phone or make an appointment to see them.

assess your situation

Creating a realistic budget can make a big difference in your spending, and help you see what you can afford in terms of mortgage payments.

It makes sense to prioritize paying for your essential household bills such as your mortgage, other loans secured on your home, council taxes, fuel bills and food.

there are many budget planners available online Which provide a framework for determining what you are spending each week or month.

“It’s also important to check that you get everything you deserve,” Paul said.

“There have been many interference from the government Recently designed to help people with cost of life crisis, and it has become difficult to keep track of all those interventions.”

He suggests starting with Citizen Advice, which will be able to provide advice on what you might be able to claim.

For example, if you are on certain benefits, you may qualify for support for mortgage interestWhich is a cheap loan from the government.

While this may help you in the short term, it will mean that you will pay more in the long term because you will be charged interest on the loan, so you need to weigh your options.

other organizations including turn2us And money helper will also be able to help you.

keep in contact

No matter what action you’re taking, keeping your lender up-to-date about your financial situation will help them help you better.

Be honest about what’s going on, tell them what you’re going through, and let them know if your circumstances change further.

Show that you’re willing to pay what you can

Once you contact your lender, they may be able to change this terms of your mortgage To help make it more affordable for you.

That’s why it’s so helpful to have a budget ready in advance, so you can tell the lender exactly what you can afford.

“Depending on the circumstances, there are different solutions,” Paul said.

“If it’s going to be a temporary problem for maybe two, three, four months, your lender may be able to” reduce your mortgage payment In that period, and you can catch them later.”

If your problem persists, for example you have developed a long-term health condition that means you can no longer work, you can ask to make a change. loan repayment plan,

“This could mean extending the mortgage term from where it should have ended in the first place to make the repayment more sustainable,” Paul explained.

He suggested that being honest with your lender in the beginning would help.

“If your mortgage needs to be £400 a month and you think you can pay £350, then that amount needs to be sustainable,” he said.

“If it’s not, it’s not going to do you or the lender any favors.”

Paying something also shows that you are working to fix the problem.

“It’s important to make sure you continue to make that low payment every month because it shows you’re doing what you can,” he said.

Explore all your options

Lenders take action to take back someone’s home only as a last resort, and they will give you several options before doing so.

If you’re concerned that you might not be able to afford your mortgage repayment if the interest rate goes up, talk to your lender about whether to switch to a loan. fixed rate mortgage would be the right option for you.

“Your lender can take action directly, identify the problem, find a solution, and apply it to your next monthly payment,” Paul said.

This can be as drastic as moving to an interest-only mortgage, or moving from a variable to a fixed-rate deal to bring your monthly payments down to a more manageable level.

He said that as long as you stick to what you have agreed upon, your lender will not take over your house.

Debt Advisors – Where to Go for Help

Debt advisors are organizations that provide free, unbiased credit advice to consumers for free. They can help you take back control of your finances.

  • face-to-face services, such as your local citizen advice and local officials
  • Independent telephone helplines, such as the National Dateline (0800 808 4000), and the Business Dateline (0800 197 6026) for the self-employed and those with small businesses
  • Online and web chat services, such as www.nationaldebtline.org And www.businessdebtline.org
  • other donations such as step change date charity
  • MoneyHelper has one online search tool that helps you find free loan advice in your area

Get advice from reliable sources

Make sure you only seek advice from people who have relevant expertise, cautioned Paul.

Your lender will be able to help, and you can also get free, independent advice from organizations like National credit line, citizen advice, Shelter and other free, independent loan advisors.

These organizations won’t judge you or make you feel bad, they will help you find ways to manage your debt.

But there are companies that want to exploit people in financial difficulties, Paul said.

“You see a lot of advertisements online, especially when people are facing challenges regarding income and expenditure and the economy is not in good shape for most households.

“You’ll always find people who are walking scams Or who want to earn money from your position.

“Official organizations will go through your budget with you, negotiate with your creditors to make sure you’re paying what you can, and there’s no charge for it.”

Be wary of any company that charges you for help, he advised.

“I can’t stress this enough: Get independent advice respected in your circumstances rather than trying to sort it out on your own because you’re worried about what will happen if you talk to your lender.”



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