If you are struggling with your mortgage, you can start to regain control by writing a monthly budget. This is an invaluable tool in helping you to understand how you are spending your money, how much money you owe and who you owe it to. Whilst this can be unnerving, it will help for when you approach any third parties for help and advice. As well as collating your monthly outgoings, you should also consider if there are any other ways that you could improve your situation. For example:
o Could you get a lower mortgage payment -perhaps by extending the term, taking a payment holiday or negotiating a lower rate?
o Are you entitled to benefits that you aren’t currently claiming?
o Do you have Mortgage Payment Protection Insurance that you could claim on?
As well as any mortgage arrears, you should also establish if you are behind on any other loans, particularly those secured against your home. Once you have a clear idea about your debts and outgoings, you may find it helpful to seek independent mortgage advice from the following organisations:
o The Citizen’s Advice Bureau offers legal, financial and benefit advice, free of charge to everyone. There are bureaus in most towns and every London borough.
o Shelter is a national charity that helps people facing housing difficulties. Their advice is free, as is their advice line.
o The National Debt helpline also offers free advice if you are worried about your debts.
You may also find it useful to talk directly to your mortgage lender. Many people are intimidated by this prospect and presume that any mention of difficulty will make the problem worse. In fact, lenders are generally sympathetic, and committed to helping homeowners. Please also be reassured that there are protections in place and protocols that banks are obliged to follow. Even if you are already in mortgage arrears, repossession is always a last resort.
Whilst you are in discussions with your lender, you should still try and make a payment on time every month if possible, even if it is not for the full amount. This shows that you are making every effort to meet your commitments. Depending on your situation, there are also a number of specific mortgage support schemes that might be available to you. Some of these include:
Homeowners Mortgage Scheme
If your family income has dropped due to redundancy or a reduction in hours, you may qualify for the Homeowners Mortgage Scheme. This scheme allows you to defer some of the interest on your mortgage for up to two years. Mortgage advisor Sheffield
Support for Mortgage Interest
If you are a home-owner who is claiming certain kinds of benefits, you may be eligible for assistance in paying the interest on your mortgage for up to two years. Your local job centre can advise you further.
Mortgage Rescue Scheme
The Mortgage Rescue Scheme is an England-only government scheme, run by your local housing authority (if you live outside England, speak to you local council about equivalent schemes). Those who are eligible could get financial help to stay in their house, either by selling it to the local authority and renting it back, or by receiving a low-interest loan to pay off some of their mortgage. For more information and eligibility criteria, please speak to your local council.
If you have fallen behind on your debt repayments, you can seek mortgage support from relevant organisations. For more information on what to do if you have mortgage arrears, please visit the Mortgage Help website at http://mortgagehelp.direct.gov.uk/. Mortgage Help is run by the government and offers free, impartial mortgage advice on the protections and benefits available to you as a homeowner.