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ReutersUS mortgage industry faces job losses as refinancing dries upReutersThat decline has come as interest rates on most 30-year mortgages has climbed to 5.1 percent, the highest since February 2011. Homeowners who have borrowed since then lack the opportunity to save money by refinancing. “We're going to see people ...and more »
Money MarketingOpperman backs initiative to reduce DC transfer timesMoney MarketingThe framework commits administrators of occupational pension schemes work rapidly towards a 21-day end-to-end transfer time, and a 14-day timetable for personal pensions. The industry group endorsed a ... Opperman said: “Pension transfers empower ...and more »
Mortgage SolutionsTML, Cambridge BS and Pepper Money shake up product ranges – roundupMortgage SolutionsPepper Money has reduced the price on seven of its two-year fixed rate residential mortgages. Rates have been cut on Pepper 18, Pepper 12 and Pepper 6 for clients who have not had a CCJ or default in the last six months. On Pepper 18, two-year fixed ...and more »
Your MoneyE.ON and BNP Paribas to develop 'green mortgages'Your MoneyMichael Lewis, chief executive of E.ON UK, said: “Green mortgages have the potential to be a game changer in the delivery of affordable finance and we are ready to meet the challenge for homeowners motivated to take the step into energy efficient living.and more »
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Factsheets

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Can't pay the mortgage?


Mortgages come with a health warning - if you don’t keep up your agreed monthly payments your home may be repossessed by the lender14-05-2009
which means the court can order you to move out and give the lender the right to sell the property. (If you’re already at that stage see ’Facing Repossession’ fact sheet)

It’s a stark warning and the Government has told lenders they must use repossession only as a last resort. 13,161 homes were repossessed between September and December last year. The total number of households behind with repayments at the end of Dec 2008 was 340,000. The Centre for Policy Studies thinks as many as 145,000 households will be homeless by the end of the recession and another 245,000 will have repossession orders against them.
 
The Bank of England cut base rates to just 1% last week - the lowest interest rate ever. Some lenders passed on the cut to their borrowers making mortgages cheaper for many. But some didn’t because they need money coming in from savers and if they pass on interest rate cuts to borrowers they have nothing in the kitty to pay interest to savers. A bit of a catch 22!

And interest rate cuts are only part of the picture. If you’ve lost your job and qualify for help to pay your mortgage (see fact sheet) then you will probably be able to keep the roof over your head. But if the total income of the household is drastically reduced because of the loss of a job, yet still high enough to exclude you from claiming any help for the welfare benefit system you’re likely to struggle.

So what do you do?

Get the full picture. List all your income; your bills, credit, cards, loans; and work out in detail how much you spend on food, travel, household items down to the last toilet roll.

Look for ways you can make savings, cut spending or increase income (Take in a lodger? See fact sheet ‘Making Money out of your Home‘)

Contact the lender straight away and discuss the situation. Don’t wait until arrears have build up as it will be harder to get out of the debt.  

Work out what you can pay and try to come to an arrangement. The lender may be willing to restructure the mortgage so that you pay it off over a longer period or so that monthly payments are lower, or you may be eligible for the Homeowner Mortgage Support Scheme which allows the most vulnerable households to defer mortgage interest payments for up to 2 years.

If the lender refuses to help see a money adviser at your local CAB (find details in the phone book or online) or call National Debtline 0n 0808 080 4000. They offer free confidential help and advice. There are other organisations that can help. Check online to see what’s available in your area but don‘t delay - queues for help are building up.

The good news according to the Council Of Mortgage Lenders - is that because lenders are finding it difficult to sell properties - like other would-be sellers, they are considering ways of allowing people to stay in their homes - perhaps paying rent - until they can start paying a mortgage again.

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