Maternity Leave - struggling with mortgage payments

clothbots

Hi, I'm currently on maternity leave following the birth of our daughter and am consequently on SMP.

We are finding it difficult to make our mortgage payments as this is a significant reduction in our monthly income.

Our mortgage is with Nationwide. I rang and asked if we could take a payment break for a couple of months until I go back to work or alternatively switch to interest only payments.

The answer was no as we do not have 80% LTV.

I thought banks were supposed to be being a bit more understanding at the moment. They basically said that our only option was to default on payments which we don't want to do.

Does anybody have any advice please? Is it worth asking them again?

tessie_bear

hi...could u phone the bank back and ask to speak to someone else/someone more senior....im sure there is something they can do to help u.....have u claimed tex credits and family allowance...both might hepl a bit...could u try cab ?
hope it works out

beecher

I'd recommend trying to cut down on bills elsewhere, ie getting rid of Sky, gym membership or any extras like that. Trim your food bills, sell the car - your mortgage should be the last area you cut back on. If you go to the Debt Free Wannabee site they can help you. They'll also help you build up an emergency fund so as you have savings to fall back on in the future.

surreysaver

You could go back to work - I know you have to give eight weeks notice, but they may allow you back sooner - or could your partner leave work if he earns less than you?

ILW

clothbots wrote: »

Hi, I'm currently on maternity leave following the birth of our daughter and am consequently on SMP.

We are finding it difficult to make our mortgage payments as this is a significant reduction in our monthly income.

Our mortgage is with Nationwide. I rang and asked if we could take a payment break for a couple of months until I go back to work or alternatively switch to interest only payments.

The answer was no as we do not have 80% LTV.

I thought banks were supposed to be being a bit more understanding at the moment. They basically said that our only option was to default on payments which we don't want to do.

Does anybody have any advice please? Is it worth asking them again?

Did it not occur to you that this could be a problem when you took out the mortgage?

TEDDYRUKSPIN

People here are so nice (being sarcastic)! The person above is only asking for some help. Unfortunately people with mortgages who want a family tend to get penalised but people who just bum off the system can have as many kids as they want.

Anyway, Nationwide can not reduce your payments to interest only as you must have a 80% LTV. This is correct! A new regulation came in recently which allows you to have a longer break but only if you can show you are having extreme problems. However, different institutions might penalise you by putting you in arrears and hence having bad credit in the near future.

It is correct that the first thing you must do is cut back on luxuries above such as sky etc. Maybe even sell rubbish you do not need on ebay etc. As this will not bring you alot of savings, I suggest you go into a branch in person first! Do not phone up! They are useless!

They will give you a response and maybe able to reduce some kind of monthly payments. If not, your only way is to continue to pay your monthly payments.

Fliss_M

I applaude you teddy. Rightly said

I had problems myself when I was on mat leave. SMP really is quite naff.

Go into branch. If you can show your plan for your return to work, and how long that will be, they may be more helpful. As its a tempory problem that has an obvious end, it should work in your favour.

Obviously as a new mum, the last thing you want is to return early, this hung like a shadow over my Mat leave, but try and look at that posiblitlity as its over and above better then arrears.

Oh, and I had this at my gym. If you have a membership, unless its states in the terms, you can quite and use your non-paying leave as the months notice. Mine tried to make me pay for that month but it didnt say so in the terms.

gordano_2

I think it is harsh and unfair for them not to let you switch to interest only in this climate.

My advice would be to put your request to them in writing and if they decline then ask them to put it in writing to you. If then in the future the bank try and take you to court for payment arrears you will be able to show their refusal for interest only - this will go against the lender in court.

silvercar

I think it is harsh and unfair for them not to let you switch to interest only in this climate.

The problem is that the shortfall in income has been caused by maternity leave and reduced pay to SMP levels. Nothing to do with the recession, but a planned break on lower income.

lukekelly_2

If it is only for a short period of time you could always use 0% credit cards to spread out the next couple of month's mortgage payments over the next year.

I also feel I should defend the mortgage company here. You and they have a contract saying that they will lend you £x in exchange for you paying them £y a month for z years. They have kept up their end of the bargain and all they have asked is that you keep up yours.