Mortgage problem with possible redundancy

md2012

Hi all, looking for some advice about my mortgage payments.

I have just been told today that my company is losing two thirds of its workforce in February so I would guess I will be losing my job.

I still have 26 years to run on my mortgage and am seriously worried about how I will be able to make payments. Any redundancy payment I will get will cover my credit card debt.

Should I look into taking out mortgage payment protection insurance?

Thrugelmir

If you are already aware of the impending redundancies. Then rather late in the day to take action.

md2012

The redundancy news is completely out of the blue, are you saying I will not be eligible to apply?

There are no guarantees I will be on the list but I suspect I will be.

ACG

Insurance is to cover a possibility, not a certainty - It is certain people in your place will be made redundant, so no insurer is going to take on that enhanced risk.

Probably worth looking at making cut backs sooner rather than later. Look at ways to save money, look for other jobs, maybe see if you can get something started working for yourself?

I was made redundant around 3 years ago (one of the best things to ever happen to me, my payout was only around £3-4k not a lot really). From them telling me, to me actually leaving it took about 3-4 months. So its not like you have no income from tomorrow, you have plenty of time to start looking for another job.

Easier said than done, but dont let it worry you just yet you do have time on your side to sort something else out.

nidO

mortgage payment protection insurance will generally have a clause along the lines of whether your redundancy is forseeable and if it is, the insurance isn't valid.

The fact that you've asked the question demonstrates that your redundancy is forseeable and so you won't be able to legitimately claim it, if you really do want to try to defraud an insurance provider though do be aware that I imagine they'll be highly suspicious if you take out a policy today then end up putting in a redundancy claim in 2 months time, they'll probably investigate thoroughly to see whether there was any chance you knew it might be coming (which you do).

md2012

Thank you for the advice and taking the time to reply, I now know mortgage protection insurance is not going to be an option for me.

opinions4u

1. Stop all non-essential spending now.
2. Reduce all essential spending. Downbrand in the supermarket. Terminate the Sky. Don't use unnecessary petrol when you can walk.
3. Build up a savings balance to help see you through.
4. Prepare the best CV possible.
5. Be positive. This could be the start of something better.


Good luck. The economy is growing. There is hope.

tBagpuss_2

what type of mortgage do you have?
Some lenders will allow you to apply for a mortgage payment holiday for 3 - 6 months, in other cases it may be possible pt put a repayment mortae on to an interest only basis temporarily.

I would suggest that you start cutting back now - try to reduce your outstanding credit card debt, starting with the debt with the highest interest rates (and move to lower deals / 0% balance transfers if you can - you may be able to get better deals now while you are working, than in a few months down the line if you are now)

Also look at your general budget and consider where you could make cuts - there are lots of good suggestions on the forums - everything from turning heating down, buying fewer branded products etc, and if you start now, if the worst happens you will have made some savings over the next couple of months and have reduced your bills, which may free up some money to help pay the mortgage in the event that you are made redundant.

It's also worth starting look around for alternative jobs, and even applying.

Good Luck

md2012

I have a 75% value mortgage, there is a second charge for the remaining 25% due to Barratt homes which initially was due after 10 years but is now down to 6 years. I guess I am not in a good position at all

Thank you for the suggestions everybody, I am already looking into cutting back on everything.

Strebor

You could look at getting a lodger, renting one room you can earn about 4250 tax free per year...look up governments rent a room scheme. There are a couple of rent a room website to find lodgers.
Might not be a full answer, but might help if you can't get a job paying enough.
Best of luck.

pinkteapot

If you do get to a point where you know you're going to have trouble paying, talk to the lender sooner rather than later. As above, a payment holiday may be an option. Far better to approach the lender than fall into arrears.

Good luck for Feb and fingers crossed you can find a new job quickly.

Back in 2006, I bought my first flat with a 100% mortgage at 4.2x my salary. I was made redundant three months later. It was terrifying so I know how you're feeling.