Mortgage Arrears

Terry_collins

Hi Everyone

Been unemployed for a few months now had a few interviews but still no job. My debts are increasing and my mortgage is now in arrears too due to a £200 shortfall every month as my mortgage insurance will only pay £1000 a month. I am stuck in a fixed rate for another 11 months and the bank will only let me out of this fixed rate if i pay 6k upfront. Is there anything I can do as the arrears are increasing each month?

If the bank changed their minds on the rate then the mortgage payment will be made in full and there will be no arrears building up and will not leave me in the ****t when I do find another job.

Tixy

Hi

Do you have unsecured debts as well? if so are you paying them anything at the moment? If you are then revert to paying them all token payments on a £1 a month and then use anything else towards the mortgage (you'd need to send letters to your unsecured creditors to explain the situation).

Are you getting all the benefits that you are entitled to? are there any other items you can cut out to concentrate on the priority of paying the mortgage?

Not sure about your current situation but could you take in a lodger to help make up the short fall?

Have you asked the bank whether you could add the £6k fee to your mortgage? they may not but might be worth discussing it with them and explaining the situation. I suppose their concern will be how you will manage after the mortgage insurance payments stop (if you haven't found work by then).
Alternatively see if they have any other suggestions - eg could you extend the mortgage term so your payments were lower etc?

Superbiatch

Would your mortgage company put you on 'interest only' or give you a repayment holiday (unlikely in your circumstances i think)?

Terry_collins

I am already on interest only and no payment holiday allowed. I think I may contact the MP or CAB for further advice. I have negotiated with all my other creditors and taken all benefits I am entitled to already. Shame bank won't budge especially after being partially owned by taxpayers.

Terry_collins

They won't allow me to add on loan upfront payment only

Tixy wrote: »

Hi

Do you have unsecured debts as well? if so are you paying them anything at the moment? If you are then revert to paying them all token payments on a £1 a month and then use anything else towards the mortgage (you'd need to send letters to your unsecured creditors to explain the situation).

Are you getting all the benefits that you are entitled to? are there any other items you can cut out to concentrate on the priority of paying the mortgage?

Not sure about your current situation but could you take in a lodger to help make up the short fall?

Have you asked the bank whether you could add the £6k fee to your mortgage? they may not but might be worth discussing it with them and explaining the situation. I suppose their concern will be how you will manage after the mortgage insurance payments stop (if you haven't found work by then).
Alternatively see if they have any other suggestions - eg could you extend the mortgage term so your payments were lower etc?

HLMencken

Just want to add a caveat to offering token payments to non-priority creditors- they could apply for CCJs which and possibly charging orders (making an unsecured debt a secured debt against your home!) As long as your budget sheet is drawn up carefully it should be ok but its a risk you should be aware of!

Are you on Job Seekers Allowance? If the bank did for some reason stop you mortgage payments then as long as you've been on JSA for at least 13 weeks you can apply for housing costs (as long as you fit the criteria).

Definitely worth a trip to your local CAB although if you were thinking of rearranging your mortgage terms that might be more financial advice but worth getting an overview of your other options first.

Good luck!