The cost of living crisis is affecting people all over the United Kingdom, and many of us are feeling the pinch. If you’re struggling to keep up with your mortgage payments, then you're far from alone.
What to do if you haven’t missed a payment
Don’t wait until you start missing payments. As soon as you’re concerned about not being able to pay your mortgage, you need to contact your lender to discuss your options.
High inflation rates mean that many people are struggling, and so the previous government launched a Mortgage Charter that permits lenders to offer ‘forbearances’: flexible, short term support.
Asking your lender for support will not affect your credit file (i.e. your personal credit history), and your lender has to treat you fairly and consider your requests. If you’re worried about being able to pay your mortgage, but you haven’t missed a payment yet, then there are three options you can discuss with your lender:
- Temporarily lengthening the term of your mortgage, and then switching back within six months
- Switching to interest-only repayments for six months
- Switching to an alternative payment arrangement
These steps won’t affect your credit file if you discontinue using them within six months, but after six months they might. If you get benefits, you may be eligible for the government's Support for Mortgage Interest (SMI).
Citizens Advice suggests the following options:
- Reducing your outgoing costs or increasing the amount of money coming in (for example, by potentially getting a second job or looking into whether you may be able to access Universal Credit).
- Switching to a more affordable mortgage deal.
- Changing your life insurance payments.
What to do if you have missed a payment
If you’re in arrears (i.e. in debt) with your mortgage provider, try to contact them as soon as possible and don’t wait for them to contact you - which will usually happen within 15 days. Lenders have to treat you fairly and consider your requests.
If you can’t come to an agreement, your lender can take you to court to repossess your home, but it is still possible to find a consensus with them at this point. Lenders who have signed up to the mortgage charter have agreed that a borrower will not be forced to leave their home without their consent unless in exceptional circumstances, less than a year from their first missed payment.
If you’d like financial advice or you’re struggling with debt, contact Citizens Advice.
Before contacting your mortgage provider, take a look at what you can afford to pay. You will need to give them this information, so try to come prepared with a budget and a plan. If possible, you could suggest making up for the missed payment(s) by paying extra on future payments until the debt is paid. If you’re going to be struggling to make your payments for a while, you might suggest:
- Taking a repayment holiday (taking a break from your payments for a short time)
- Switching to interest only payments
- Extending the period of debt repayment
Want to discuss your options? Give us a call on 0345 450 4660.
