What Can You Do If You Can’t Pay Your Mortgage?

September 17, 2022

With interest rates at the highest level in over a decade, and further hikes expected by the end of the year, people on variable rate mortgages may be feeling the pinch. This is because variable mortgages are directly linked to the interest rate, unlike fixed term mortgages, which stay at a constant rate for a period of normally two or five years.

Even those currently on a good deal may be anxious about what the future holds, as any new deal is likely to be more expensive. The average monthly increase is set to be about £52 a month according to the Mirror, which will make a big difference to the budgets of families on modest incomes.

However, there may still be some good deals to be had, especially if you seek professional advice from a specialist mortgage broker. It may even be worth paying to exit your current deal early if the terms are good enough.

If you are immediately struggling to meet repayments, maybe because of an adverse financial circumstance such as loss of a job, then it is always advisable to speak to your lender and explain your circumstances. They be able to temporarily suspend payments until you are in a better position, known as a mortgage holiday.

However, you should be aware that taking a break from mortgage repayments may affect your credit score. It is possible to still get a mortgage deal even if you have a bad credit rating, but you may have a more limited range of lenders and products to choose from.

You may be given the option of extending the term of your mortgage, although this will ultimately mean that you end up paying more interest over time.

If you would like to find out more information about how to remortgage with bad credit, please get in touch today

Your home may be repossessed if you do not keep up with your mortgage repayments.

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