Mortgage and Money Running out

Darenth87 · 26 November 2018 at 2:56PM

despite job hunting for nearly 3/4 of 2018 I am still out of work but now getting a bit worried about paying the mortgage. it is a capital and interest type. I am 2 years into a 20 year mortgage aged 48. I put down 10% deposit and am in positive equity.

what do people generally do when they find their redundancy money is running out and you have no family to turn to for help?

My first thought was that sooner or later I will have to just sell the house pay off the mortgage and find a rented social flat and the state cn pay for it.....

I have heard of the government scheme for payments of mortgage interest. can you only get that on an interest only mortgage?
if you did this for say 4 months would the lender class that period as you taking a payment holiday? not sure what my best options are.

as the mortgage deal was fixed for 5 years if I pay it off in its 3rd year there is a penalty of about £2,500 to pay.

I am being realistic as I dont want to go into arrears with a mortgage if I cannot find work.

do I need to tell the lender my situation before selling up?

I am just so uncertain what to do for the best......finances currently means I only have about 5 months of money left.

pinknsparkly · 26 November 2018 at 10:19PM

The fact that you got a redundancy payout from your last job suggests (to me, I may totally wrong!) that you were in a reasonably well-paid professional job. Have you therefore been looking for ALL jobs, including minimum wage ones, or have you been limiting yourself to ones that come with a higher salary only? If you've not been considering those jobs then I would suggest that now is the time to do so...

How much longer do you expect the money to last? And do you think 10% equity is fair, if you were to sell in the current market (which has slowed down a lot near me at least) at a price to ensure a quick sale? I imagine you would then need to rent privately until you had run down your proceeds from the house sale before you would be entitled to council housing. I would be wanting to give myself a minimum of 4 months, with the property priced low enough to ensure a swift sale, to sell up before running out of money.

I have no specific advice about whether to tell your mortgage lender or the government schemes, but I would ring your lender and inquire about payment holidays (e.g. are you entitled to any based on what you've been paying so far? How many? How much?) so that you've got a clearer picture.

Then in a couple of months time, if you've still not had any luck on the job front (and have decided not to sell up), I would be contacting my lender and seeing how they could help me (and that is what the money advice service suggest).

https://www.moneyadviceservice.org.uk/en/articles/government-help-if-you-cant-pay-your-mortgage

From what I've read online, so long as you're entitled to claim job seekers allowance (or another qualifying benefit) then you'd be entitled to the government help (Support for Mortgage Interest) even with a repayment mortgage. Though, as you've already said, they would only pay the interest part. SMI is also a loan, and interest is charged.

p00hsticks · 27 November 2018 at 7:26PM

Sorry to hear that you've not managed to get another job.

Darenth87 wrote: »

My first thought was that sooner or later I will have to just sell the house pay off the mortgage and find a rented social flat and the state cn pay for it.....

If you are single, then in most areas your chances of renting a 'social' flat will be vanishingly small, although you will be able to claim housing benefit towards a private rental.

Darenth87 wrote: »

I have heard of the government scheme for payments of mortgage interest. can you only get that on an interest only mortgage?
if you did this for say 4 months would the lender class that period as you taking a payment holiday? not sure what my best options are.

Are you currently claimimg JSA// univeral credit ? As you;ve previously been working you'd probably be entitled to contributions based JSA (known as 'new style JSA') for six months regardless of any savings you have. If would be advisable to get claim in before the end of the year as currently they'l lbe looking at your NI record for the two tax years 2015-16 and 2016-17 but in the New year this will advance a year and so you may not qualify.

You need to be in receipt or eligible for a qualifying benefit for 39 weeks in order to get a SMI loan so if you have not as yet claimed any benefits this is not going to be available to you for a while.

https://www.gov.uk/support-for-mortgage-interest/eligibility

nyc_451 · 27 November 2018 at 10:31PM

Selling your home sounds extreme to me?...

I am a new home owner with no family to turn to (they're much poorer than me). I thought about the worst case scenario and I personally would rent out a master bedroom in my two bed flat, or let the whole flat so it pays a mortgage, or...get a minimum wage job? I'm sorry but there's plenty of those, people are just being picky...

I don't know how many bedrooms you've got but even if it is only one bed, you could rent it at a cheaper rate with no shared living room where you could stay until things get better.

Lots of money savvy people on here (not me though), I think you would get better advice if you posted more details of your situation.

Mortgage and Money Running out

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free