Worried about your mortgage?
According to new data from the ONS from June to September 2022, the proportion of all adults finding it difficult (very or somewhat) to afford their rent or mortgage payments has increased with 30% of those surveyed who paid rent or mortgages reporting that these bills were becoming difficult to afford. Are you worried about your mortgage?
Interest rates have been rising to try and combat rampant inflation. But due to fuel being thrown on the fire during the mini budget, interest rates are projected to rise even further later this year. Lenders have been quick to up their mortgage interest rates on all products, which mean that homeowners with fixed rates coming to an end within the next year or two, will likely see their bills rise considerably when they come to the end of their deal.
Three tips if you are worried about your mortgage
Don’t bury your head in the sand
Lenders will normally write to you within 15 days of a missed payment but if you are struggling with your bill, it is crucial that you talk to your lender before they contact you. Burying your head in the sand will only make things worse. Mortgage debt is what is described as a priority debt and as the name implies should be prioritised above most other types of debt you have.
Work out what you can afford to pay back
Before picking up the phone to your lender, take some time to work out exactly how much you can afford to pay back each month. There are budgeting tools available online or you could speak to a debt charity or Citizens Advice. If you have sought help, do let your lender know as showing that you have looked at ways of paying back your debt shows you’re serious about it, and can help avoid repossession orders down the line.
Discuss ways of making payments
Lenders have a duty to act fairly with customers who are having difficulties. Having a frank conversation with your lender can help them find a way for you to avoid the problem spiralling out of control. Lenders might be able to put you on a payment plan based on what you can afford to pay back. This could mean proving options to extend your mortgage term, or if your home is worth more than the mortgage, you might be given the option of adding your arrears to the total amount you owe and pay it back over the lifetime of the mortgage. We recommend that you seek advice from a qualified mortgage professional before opting for any plan , as some plans may end up with you paying much more interest over the lifetime of your mortgage.
We are here to help
Please don't worry alone. If you are worried about your mortgage, speak to us. If you are due to finish a promotional rate and move to a standard variable rate, don't wait - get in touch today.