26 Oct Mortgage – Trick or Treat?
Mortgage – Trick or Treat?
The Governments’ ‘Mortgage Repayment Holiday Scheme’ comes to an end on Halloween, but what does that mean for you if you’re still struggling to make your monthly repayments? Lee Howard, Managing Director, Howard Mortgages answers your questions.
2020 has been one serious nightmare for many of us so far, with economic uncertainty challenging many families. There’s been so much news affecting mortgage lending, and home ownership in the last few weeks, it’s been scary.
It is estimated that one third of home owners have had to take a payment holiday during COVID and many are feeling less financially secure. The Government’s mortgage support scheme allowing people to take mortgage holidays comes to an end on October 31. This means that your credit may be affected if you don’t make alternative arrangements. Millions of mortgage holders in Britain are up for product renewal in the next 12 months, and if your circumstances have changed, what does that mean?
What do you do if you’re having a mortgage nightmare?
If your situation has changed and things take a turn for the worse, please do not panic. Even if your financial circumstances change that make paying your mortgage an issue, pause for thought before doing anything; you may still have options and there will be actions you may take. However, do seek professional financial advice quickly. It won’t affect your credit score, unless it results in you missing monthly payments.
A mortgage is a loan that is secured against your home and so in the worst-case scenario, if you fall behind with your repayments, your lender might want to sell your home to get recover their money. Yet there are a number of things that you can do to minimise the risk of this happening.
Please inform your lender as soon as possible if something happens that affects your ability to repay your mortgage. That way they can take you through all the options that they are able offer you with your particular mortgage product and with your circumstances in mind. Depending on the lender, these options may include:
- Taking an extended mortgage payment holiday.
- Extending your mortgage term.
- Come to a short-term reduced payment agreement.
Please note that all the above options are likely to increase the amount of interest you will owe in the long run, so be sure to take professional advice on which action will be best for you.
What do if your mortgage circumstances have changed for the better?
If you are now earning more money than when you took out your current mortgage, have a lump sum or equity in your home, it may be worth seeing if your mortgage product allows you to make an overpayment that could help you become mortgage-free quicker, and/or reduce the amount you pay out on interest in total on the loan.
If your current mortgage has come to the end of any incentive fixed or discounted period and does not have an exit fee, or low redemption charge, it may well be worthwhile considering moving your mortgage to a new more competitive deal. There are some very positive remortgaging deals available for home owners with equity, and Howard Mortgages has access to the whole of the market.
Never before have mortgage rules been so confusing – yet financial advice so critical as it is today. An expert mortgage broker will be able to guide you through the options for you and your circumstances.
For advice on the right mortgage to suit your personal circumstances, please contact the team at Howard Mortgages on 01803 554455 or contact us here.
Your home may be repossessed if you do not keep up repayments on your mortgage.