One of the biggest problems facing a lot of people at the moment is what to do with their mortgage.
The bottom really has fallen out of both the financial and housing markets which has left a lot of us in serious difficulties. So, for example, you may now be having problems managing your debts as a whole and cannot make your mortgage repayments. One option would be to sell your home and to clear things that way. Will that work for you?
The answer to that question may well be no at the moment. House prices are in free-fall right now and you certainly won’t see a value return on your investment. Even if you do have equity built up in your property you simply may not be able to access it because house buyers are so few and far between at the moment.
Although this may seem like a problem without a solution you do have options here. And, if you are having mortgage repayment problems then you should be looking for a solution now before your situation gets even worse. Remember, if the worst comes to the worst you could see your lender have your home repossessed to get their money back and that situation is obviously best avoided.
So, what are your options? Well, first of all you need to think of a creative way of making your mortgage more affordable to you. Your lender may well be able to help you out here so you could try talking to them about:
- Increasing your mortgage to release the equity you’ve built up in your home. You could use this money to repay all your debts, get a clean slate and then start again.
- Securing a loan against your property to consolidate your debts and pay them all off at once. This could leave you with one simple loan to repay every month that should come in with lower charges and interest rates than other kinds of debts such as credit cards, for example.
- Increasing the length of your mortgage term. The longer your mortgage lasts, the lower your monthly repayments will be.
- Switching to only making repayments on your mortgage interest for a while. This will give you considerably lower costs whilst you get back on an even keel.
- Switching to a new mortgage deal for a while to cut back on your monthly repayment costs.
All of these options would give you some breathing space. This may be just what you need to get back on an even keel with your finances. Do, however, bear in mind that taking measures that lengthen your mortgage term or that only pay back interest could add quite a large sum to your overall repayment commitment over time. So, try to use these solutions as short-term measures and switch back to more standard terms as soon as you feel that you can afford to.