mortgage problems - cant afford it

val_carter

We are due to see the Mortgage co tomorrow - as not only is the fixed term coming to an end also partner no longer working and it is a struggle to find the payments. HAve put off telling them so far in hope a job would be found but no such luck - have 4 yrs left on one part and 9 yrs of remainder.
Never had problem paying before.
Do we come clean. What can we expect if anything in help
Mortgage now with Nationwide who have taken over Portman (original co )
Can anyone help - so worried

TwelfthMan

Come clean with them and tell them the exact situation as early as possible - they will appreciate your honesty and be far more willing to assist you now than if you have the same meeting with 3 months mortgage arrears.

Possible solutions.....

They may offer to put you on interest only for a period until your husband finds a job. They may look at extending the term for you to reduce your monthly payments - this one depends on age and intended retirement dates though.... if you are getting on they wont be keen on you taking the mortgage past retirement.

Go in and lay your cards on the table.... they will do their best to help you.

MarkyMarkD

Frankly, I don't agree with your advice at all, TwelfthMan.

The main benefit of having a mortgage from a relatively decent lender is that you can switch products without being underwritten again.

There is no need, or reason, to tell the lender that you are in financial difficulty.

Switch products first, to a cheaper product than the SVR you will otherwise roll off onto.

And then, if necessary, tell them about your financial difficulties.

FraudBuster

There is no need, or reason, to tell the lender that you are in financial difficulty.

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rdsmortgageman

I agree that there is no need to tell them about your financial difficulty. What you need to bear in mind though is this issue of affordabillity. The chances are that any rate they will offer you will be higher than the one that you are on at present, which will mean that your payments will increase.

The previous post mentioned converting to interest only (if you are not already on this method). This may be a good short term solution until your husband finds a job.

If you only have 9 years to go, you should have a good amount of equity in the property. Depending on value of house etc, it may be possible for you to consider moving to something smaller, thus reducing the amount of mortgage required.

Do a budget planner, work out what's coming in, what's going out and what you can afford to pay for a mortgage.

I would suggest not rushing into a new rate with the lender where you may encounter a redemption penalty should you need to move etc. Consider the above first.

homer_j_3

How much is the house worth?

How much do you owe against the mortgage?

What is the current repayment method on each mortgage? Repayment or Interest only or Part and part?

Have you missed any payments as of yet on your mortgage?

What income do you have coming in?

Have you checked to see if you are receiving all the benefits that you are entitled to?

Overall, I can see what people are saying on here about getting onto a better rate but if you simply are going to get into arrears, its better to put up for sale and realise the equity now and this would mean that you should not commit to a new deal with tie ins.

I would suggest that you try and answer the above questions so we can try and make some suggestions to see if we can make life a little bit easier for you.

You should always speak to your lender if you are not going to be able to make your mortgage payments and if a new deal will avoid that then maybe keeping quiet at this point is the right thing to do but we/you need to be certain of this before doing anything.

If you could provide answers to the above, it should give us something to work with.

MarkyMarkD

FraudBuster wrote: »

Quote:
There is no need, or reason, to tell the lender that you are in financial difficulty.

....................................

Was this post meant to mean something, FraudBuster?

minimike2

I agree with TwelthMan.

To NOT tell them would simply make it worse if things get so bad that the mortgage isnt paid.

I would like to hear one RATIONAL reason for not telling them from the above posters.

Lenders aim is to HELP YOU FIND SOLUTIONS in this situaition. If they put the mortgage to interest only / extend term to make the short term payments affordable and all payments continue to be met, how the hell is that meant to be a bad thing.

Honestly, the logic of some astounds me.

homer_j_3

MarkyMarkD wrote: »

Was this post meant to mean something, FraudBuster?

I think it was the fact that nobody should lie to their lender especially where the risk of losing their home is a real threat.

Clearly there is not enough information on here for anybody to say do not mention or do mention but the FSA guidelines state that any borrower experiencing payment difficulties should speak to the lender ASAP.

There is clearly different answers to this situation depending on what information the OP provides. IE. they may be able to pull their belts in and work through this or they could be in knee deep already and by putting them into a cheaper deal which still may be unaffordable and adding a potentially large ERC onto the debt should the property be repo'd or sold is not the right approach.

I would not suggest the lender be lied to or information be witheld. However, if the belts can be tightened and their is a solution which will clearly benefit the OP then there will be no need to talk to the lender as the trouble will have been diverted with a suitable solution.

I would hope that the OP gets some professional advice where all information can be presented and reviewed.

MarkyMarkD

My point is that there is no requirement to tell your current lender anything at all about your changing financial situation, unless you are asking them to lend you more money.

If they are not making a credit decision, they don't need to know anything and telling them isn't very likely to help.

Bear in mind that allowing a product switch is a discretionary benefit. Lenders can say "No" for any reason they like. If you tell them "I'm in financial trouble, so I want a product switch" then they may possibly say "No" when they would otherwise have said "Yes".

Changing repayment term or basis is something you can ask to do without telling the lender why. So why complicate matters by telling them things they don't need to know?

Lenders aren't going to decline such a request arbitrarily.

Having said all of that, I definitely acknowledge that any product switch is likely to bring new ERCs to the party, and that if there is likely to be a need to sell the property to clear the debt in the foreseeable future, switching products (or, particularly, switching products to a product with an ERC) is the wrong thing to do.

TEDDYRUKSPIN

I can't believe what I am hearing!!!

Don't tell, stretch... blar blar blar....

Val Carter, too much assumptions are happening here. All you have told us is that affordability is an issue to your partner no longer working.

I suggest you just pop in to your lender's branch and ask for advice. Some companies charge only a small fee to stretch the term of the mortgage (age permitting). Some allow you to temporary switch to interest only.

Thing is! DO NOT GO INTO ARREARS! Lenders hate this. EVEN WORSE! Do not ignore the letters if you do go into arrears.

SOLUTION:

Go into the branch and ask for advice.