According to a report issued by the CML
(Council of Mortgage Lenders) early in 2009 it is anticipated that over half a million UK consumers are going to fall behind in their mortgage repayments over the course of the coming year. This will, in part, probably be down to debt management
problems in many cases but, in many more it is likely that people who lose their jobs
could well find themselves unable to meet their mortgage payments.
If you fail to make a mortgage repayment then the amount you don’t pay will be counted as mortgage arrears. Given the size of most mortgages nowadays these can soon add up and you could quickly find yourself thousands of pounds in debt with the very real worry that you could lose your home. So, if this does happen to you then what should you do?
Your first priority should be to talk to your lender. UK lenders are being actively encouraged by the government to be more sympathetic towards people who get into arrears for this reason. They could, for example, help you ease the strain by:
If you lose your job
- Allowing you to merely pay the interest on your mortgage for a while to cut your costs.
- Enabling you to take a payment break for a couple of months to ease the pressure.
- Letting you extend the term or change the conditions of your deal to give you more affordable payments if this would help.
then you can also get help from the government in certain cases that could also be an option worth looking at. In the past there wasn’t a lot of help you could ask for here. The current state of the housing and mortgage sector has, however, led to initiatives that could be useful to you.
For example, at the moment the state will help you at least make your interest payments on mortgages if you lose your job. You cannot claim this help until you have been unemployed for 13 weeks but this is a far shorter time than you used to have to wait to get this kind of help in the past.
At the moment this deal (known as ISMI – income support with mortgage interest) is only available to homeowners on benefits whose mortgages fall under a £200,000 value level. This is, once again, an improvement on previous schemes where you couldn’t claim if your mortgage was higher than £100,000.
It is planned, however, to extend this scheme shortly to take into account people who lose their jobs and who have higher mortgages than the current limits. So, if you do lose your job and worry about going into arrears then this scheme may be worth looking at. And, remember, if you don’t qualify for help here then you may still find your lender willing to sort you out.