Please note the council is not able to give financial advice and this page is for guidance and signposting only. Please contact the organisations listed within this page for official financial advice.
The Government has announced a new mortgage charter, agreed with the UK's principal mortgage lenders and the Financial Conduct Authority, to help those with mortgages as interest rates continue to increase.
Some of this support is for all people who are seeing rises in their repayments but there are two other specific areas of focus: people who are at real risk of losing their homes because they fall behind in their mortgage payments, and those who are having to change their mortgage because their fixed rate comes to an end.
The lenders, covering 75% of the market, have agreed the following to support residential mortgage holders:
For many families, the cost of running a home has become increasingly difficult.
Broadly speaking, worry about paying your mortgage will stem from one or both of the following concerns:
If your mortgage is becoming unmanageable, you should act quickly to contact your lender. Do not ignore any payment problems - mortgages are priority debts. This means you should pay them before any other debts as not doing so could lead to your home being repossessed. Even if you cannot meet the full monthly instalments, pay what you can and contact your lender as soon as you start having payment problems.
If you are having problems paying your mortgage (or secured loan) or are in arrears, help and assistance is available.
If you are struggling to pay your mortgage, it can be useful to complete an income and expenditure assessment. This will enable you to take control of your finances and see where you may be able to increase your income or reduce your outgoings.
A detailed breakdown of your income and expenditure will help your lender(s) understand your financial situation. This will enable them to advise which solutions are most suitable for your situation and come to an arrangement.
Even if you cannot afford your full mortgage payments, pay as much as you can to show your lender that you are committed to resolving the situation.
Get free advice If you’re anxious about being unable to meet repayments, there are plenty of advice services which provide guidance for free:
A scheme to give households time to receive debt advice and find a solution to sort out their debt problems. Breathing space will last for 60 days as long as applicants remain eligible during which time all creditors who have been included will be informed and must stop any collection or enforcement activity.
The Breathing Space scheme can help people struggling with debt, including rent or mortgage arrears.
It can freeze payment demands and legal action while you get free debt advice.
It could also stop or delay eviction for rent arrears or mortgage repossession.
You can have a:
A mental health crisis breathing space doesn't have a time limit. It usually ends 30 days after you stop getting mental health crisis treatment, but you can apply again.
Your debt adviser may be able to give you ongoing help when breathing space ends.
Only a regulated debt adviser can put you on the breathing space scheme.
You'll need to:
Get free regulated debt advice from:
Check to see if you have an Income Protection policy, this is an insurance policy that can help support you with a monthly payment if you’re ill or injured and are unable to work. It is normally taken out alongside your mortgage deal. It pays a proportion of your lost earnings, which could help cover your monthly outgoings.
Income protection can provide you with either a fixed monthly benefit amount or cover a percentage of your earnings following the deferred period. The benefit amount can be paid for each eligible claim for a set amount of time from up to 12 months, or until retirement.
If you do find you have a policy, contact your insurer as soon as possible to ensure there is not a delay in payments.
Equity release allows individuals aged 55 and over to release money from the property they live in without having to make any monthly repayments. There are two types of equity release: Lifetime Mortgages and Home Reversion plans. Learn more by visiting Equity Release Council website.
If you are an owner occupier or in a shared ownership scheme, Universal Credit may help with the interest on a mortgage and/or other loan secured on the property you live in. This is called Support for Mortgage Interest (SMI), and is paid as part of the Housing element.
You may receive SMI if you and/or your partner:
Since 5 April 2018 SMI became a loan, which means any SMI you receive from this point must be repaid with interest when you sell or transfer ownership of your home. Prior to this date it was a benefit that did not need to be paid back.
Ensure you claim all the benefits you are entitled to under Universal Credit.
Even if your lender has started repossession action, it is not too late to come to an arrangement. If you are able, you should offer your current monthly payment, plus an affordable amount off the arrears.
All mortgage lenders are regulated by the Financial Conduct Authority (FCA).
The FCA has rules about how lenders deal with their customers. These are called the Mortgage Conduct of Business (MCOB) rules.
Your lender must treat you fairly. They must consider any suggestions you make to deal with payment problems and arrears. Your lender should not repossess your home unless all reasonable attempts to resolve the situation have failed.
With your agreement the lender should consider whether to:
They should allow you time to sell your home if you cannot come to a repayment arrangement.
They must keep records of their contact with you including phone calls where arrears or charges are discussed.
More information is available about Repossession rules mortgage lenders must follow - Shelter England
In the years before the FSA regulated the Sale and Rent Back industry a number of unscrupulous companies unfortunately took advantage of homeowners. The largest false promise used at the time was the one that said sellers could stay on indefinitely after selling.
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