mortgage repayments Archives

Dec 6

What will happen to my mortgage if I’m made redundant?

I have been warned I may be made redundant in the next few months if my company’s business does not pick up. I am very worried about losing the home I bought 15 years ago on which there remains a mortgage which I continue to pay. Is there anything I can do to ensure that I remain in the property if I lose my job and can’t find another quickly?

If you have a mortgage and you encounter employment difficulties, or are made redundant, then the best advice is to speak to your Lender immediately. There is every chance that you may be able to find alternative employment relatively quickly and any difficulty which you may have making mortgage repayments will, hopefully, only be temporary.

Most Lenders will be willing to co-operate and assist you during such difficult times and it is always better to contact them immediately you are aware of a problem, or potential problem, rather than sticking your head in the sand, being unable to make payments for a few months and then be the subject of arrears proceedings.

The Lender may be able to offer you an extended term, repayment holiday or, indeed, advise you as to ways in which mortgage repayments can be reduced during your period of unemployment.

There may also be schemes available whereby you could be assisted by Housing Associations who may be interested in purchasing your property on a Shared Ownership basis to assist you in such circumstances if the prospect of your re-employment was not great.

* Emyr Pierce is Managing Director of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email law@emyrpierce.co.uk

Sep 9

I’m struggling to afford my mortgage – how can I avoid losing my house?

I am experiencing severe problems with paying my mortgage as my working hours – and salary – have been reduced by half. What can I do to ensure I don’t lose my house?

With increasing unemployment a consequence of the current economic conditions, more and more people will experience difficulties in meeting their mortgage repayments. The critical point to bear in mind is to ensure you approach your Lender immediately you are experiencing difficulties as there are various options open to both you and them in addressing short-term problems.

Sadly, the majority of people, probably due to the stress of the situation, stick their heads in the sand and do nothing, allowing arrears to build up over a period of months. Inactivity and the reluctance to meet the problem head on will cause more problems than it solves, as your Lender will become sceptical as to your genuine willingness to find re-employment or resolve your financial problems.

By contacting your Lender immediately you can discuss the various options available. Depending on the extent of mortgage involved your Lender may be able to offer you a “payment holiday” period while you find re-employment or get yourself back on your feet or maybe transfer a repayment product on to an interest free arrangement temporarily depending on what you can afford.

Do not pretend that there isn’t a problem. Meet your problem head on. You may be relieved to hear there may be short terms solutions for your predicament.

* Emyr Pierce is Managing Partner of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email law@emyrpierce.co.uk

Nov 16

Consolidating loans into a mortgage

I am hoping to buy my first house, but I already have several credit card debts as well as a Student Loan. Could I consolidate those loans into a mortgage – or is that frowned upon by the Financial Institutions these days?

It is more than likely that any successful application for a mortgage will require you to repay your existing loans out of the monies advanced. By reducing your debts the mortgage company will be more confident that you can afford to make the mortgage repayments as your other loans will have been discharged.

The question will be, of course, whether or not you are able to borrow sufficient funds to cover both the purchase of the property and the repayment of your existing loans, which will inevitably mean that you will need to find at least 10% of the purchase price by way of deposit.

If you are able to consolidate your existing loans in this way then your overall borrowing will inevitably be cheaper.

Dec 8

Should I wrap up all debts in first mortgage?

I have three credit card debts and a student loan outstanding – and am about to apply for my first mortgage. Would it be more sensible for me to include those debts in the mortgage application so I end up with one loan?

You will be required to disclose any existing debts or loans which you may have in any mortgage application in any event. The mortgage company will also carry out extensive financial checks against you in order to identify the extent of existing loans, or debts, that you may have before deciding to add to these loans by granting you a mortgage.

This is all carried out by your lender in order to establish that you can actually afford to make the mortgage repayments and that you are not over-burdened with existing liabilities which may result in your falling into arrears with any mortgage repayments.

It may well be that as a condition of your mortgage the lender will require you to settle some existing loans, or consolidate them under the one mortgage loan – providing this meets their lending criteria and satisfies any loan to valuation requirements which they may have.

Before you incur any expense in making any mortgage application you should satisfy yourself that you meet the lending criteria and that all existing loans are fully disclosed as your lender will find out about them in any event!