missed mortgage payment

recovering_spendaholic

I am self employed and struggling at the moment to get fees in for work I have done. I missed one month's mortgage and have arranged with Cheltenham and Gloucester to spread this over the next few months by adding it to my regular payment. This month I find that I am in a similar situation and it will be a struggle to pay the mortgage. I asked about a payment break and they said no because I have arrears. Could I ask them to make the mortgage interest only for a few months or are there any other options without me borrowing extra or using credit cards etc? There is 10 years left on the mortgage and the monthly repayment is £608.

dunstonh

Could I ask them to make the mortgage interest only for a few months or are there any other options without me borrowing extra or using credit cards etc?

You can ask them but typically interest only is not granted unless you have a repayment vehicle (FSA told lenders that interest only should not be used as an excuse to make it affordable). They have some discretion and you can ask but don't be confident that they will say yes.

Pop over to the debt free wannabee section of the board as having a second missed payment is deadly serious as you start to enter where the lender will consider repossession as a potential option. The people in that section of the board can help with budgeting problems.

huzzer84

You may be able to extend the term of the mortgage, provided this will not take you beyond retirement age. Increasing the term to 15 years instead of 10 may bring the monthly payment down to around £450, where it may be more manageable and allow you to get back on track.

If your earnings increase again you could always overpay and still aim to pay it off in 10 years, just with a bit more of a safety net right now.

recovering_spendaholic

Thanks for the advice. I rang Cheltenham & Gloucester and told them that I was having problems and they agreed to me missing 2 payments and then spreading this arrears over the next 12 months. They were really nice and couldn't have been more sympathetic.

The net impact on my mortgage is £100 extra which I can manage now that I've got the breathing space to chase up my fees - it's not that people won't pay me - it's just that I am used to a salary and waiting for invoices to be paid takes some getting used to!