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Mortgage payments often make up a substantial part of a household’s monthly outgoings, and it is often a feat to pay off a mortgage entirely. Rules in many mortgage arrangements require people to make a set amount of contributions to paying off their loan each month. Because mortgages can often be high, paying one off often takes decades of hard-work and commitment.
And failing to pay a mortgage could have disastrous consequences, with some fearing their home may ultimately be repossessed.
However, thankfully, homeowners do not have to consider extremes immediately, as there is usually help available.
Assistance with mortgage payments could prove vital to those who are attempting to keep up.
And with unemployment unfortunately forecasted to rise within the coming months as a result of the COVID-19 crisis, it is likely many will be looking for ways to manage their payments.
While mortgage holidays are still coming to an end, there remains time to take advantage of the support offered by the Financial Conduct Authority (FCA).
Britons have until October 31, 2020 to apply for a mortgage payment holiday, and with the agreement usually lasting three months, this could protect homeowners up until the new year.
However, such agreements must be confirmed with a lender, as failing to do so would count as a late payment, affecting credit ratings.
Understanding the implications of a payment holiday is also key, as such an arrangement could mean a person ends up paying more in interest in the long term.
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By law, lenders are also required to help out those they are borrowing to.
As a result, speaking to a lender can often be the first port of call if a person finds themselves in difficult circumstances.
A lender has to make reasonable efforts to provide Britons with a helping hand.
This could include readjusting the terms of a mortgage to facilitate a different schedule of payment, for example.
Some lenders allow people to make the payments they can afford temporarily, which means borrowers can still work towards mortgage goals while not falling further behind.
To switch to an interest-only deal is a decision which must be carefully considered, but one which may help those borrowing.
The option is available for those on a repayment mortgage and helps to reduce monthly payments.
But it is often only a suitable arrangement in the short-term, as Britons must also ultimately repay the original amount they borrowed before the term comes to an end.
Finally, Citizens Advice has urged people to take action quickly to stop themselves falling into mortgage dept.
Switching to a cheaper mortgage or insurance deal is often considered as one of the best ways to achieve this goal.
Their guidance explains: “You may be able to find a cheaper mortgage deal with another mortgage lender.
“You may have to pay charges for changing your mortgage lender and you will still have to pay off any money you owe to the first lender if you’re behind with your payments.”
Those who are looking to renegotiate the terms of their mortgage are encouraged to seek advice.
This can be done through organisations such as Citizens Advice or through dedicated mortgage adviser who can help with individual circumstances.
The FCA has proposed that lenders offer further tailored assistance to homeowners once payment holidays come to a close.
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