A mortgage is a serious commitment, and paying it back requires discipline and planning. But if you’re struggling, support is always available, especially with the introduction of the new Mortgage Charter. If you can’t pay, what should your next steps be?
- Don’t panic
First things first, remember to keep a cool head. If you’re struggling to make payments, lenders seek, in the first instance, to come up with a payment plan to help you get back on your feet. You’re not going to lose your home overnight; repossession is a last resort. Indeed, in the first three months of this year, only 750 homes and 410 buy-to-let properties were repossessed (1).
- Talk to us
If you are finding it hard to keep up with costs, the best thing to do is communicate with us early. By tackling the problem head-on, you can prepare and adapt before you end up in a difficult position. The good news is that several options exist to mitigate the higher bills. Examples include extending the term of your mortgage, which can reduce the burden now but will ultimately result in more being paid back in total. It is also possible to switch to an interest-only mortgage, reducing the amount you’ll pay your lender each month.
- Protection is key
Lenders say the most common reasons for people falling behind on mortgage payments generally involve life-changing events such as a job loss or serious illness. This highlights the importance of protection policies such as income protection or critical illness cover.
In short… Keep calm and call us!
(1) UK Finance, 2023
🚨 Data accurate as of the date of publication – 19.12.2023
🚨Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.
Source: Quilter Financial Planning – Essentially Mortgages Q4 2023
