If you are having difficulties to pay your mortgage, then you must take some measures to readily address the situation.
Several reasons that may arise that could result in distortion of the mortgage agreement. While some mortgage problems are deliberate, a majority of people failed to meet their mortgage obligations unintentional;
Deliberate actions could be attributed to,
- Improper planning of finances, and
- Poor management of personal finance;
Unintentional actions may be as a result of;
- Dismissal from your job or termination of your work contract;
- Forced early retirement;
- Some unforeseen issues such as health problems;
Legal actions will be taken for defiling a mortgage repayment. This may result in the sale of the mortgage property. The property would be repossessed and auctioned. It should however be noted that if the property cannot be sold worth what is required to discharge the loan, the rest of the money is debt. A calendar would be drawn for its repayment. The expenses related to the court bailiff are borne by the debtor.
When faced with difficulties in repaying your mortgage, you should consider applying the following four steps;
- Reduce your monthly payments
Meet your lender and explain your situation. Reduce your monthly payments to what you can afford. This will probably increase the period of loan repayment and you will end up paying more interest. Nevertheless, it will relief you of the stress of not being unable to respect the terms of the agreement and your home will not be at risk. Failure to pay the monthly quarters will result in court action with consequent seizure of your home.
More over depending on the type of mortgage, you may decide to halt the mortgage repayment process temporarily. Once you get stabilized you re-launch the repayment process.
- Switch to a cheaper mortgage
You can switch to a cheaper mortgage if your mortgage is not fixed to a mortgage provider with cheaper interest rates. Discuss with your lender the possibility of reducing your interest in case, he is unwilling, then you can switch to a new mortgage lender. However, there are other associated fees that should be considered such as legal and administrative fees that should be considered. You may enquire from your new intended lender what fees or that he can cover either partially or entirely.
You will need to work out your household budget, including extra cash you earn; the left over money could be used to pay off your mortgage debt.
Some appropriate analysis could be taken to analyze the money coming in and reduce your spending.
- Get a second job or a highly paid one. You could rather work overtime to gain some extra cash;
- Claim some benefits or tax credits;
- Try to reduce your consumption of water, electricity and fuel consumption so can have low cost bills to pay for;
- You could rent part or your entire home. If you give your home out for rents you can live in a smaller and cheaper apartment. The extra money you get from the rents can cover part of the repayment for the mortgage dues.
- Other benefits that can help towards mortgage repayment
Income support for lone parents, welfare payments, job seekers allowance, pension credit are all benefits that could be diverted towards your mortgage repayment. With such benefits, discuss the flexibility of repaying your mortgage upon reception any of these. This will have a significant impact in the decrease of the interest rate.
Whatever the case, when mortgage is well planned coupled with personal discipline and organization its repayment should be very smooth and less stressful. Always consult the services of a mortgage adviser which is very often free of charge.