Recent figures suggest that house prices in the UK have started to slowly rise again and with them, the mortgages granted to first-time buyers have followed the trend and shown a gradual increase over the past few months. Sadly though, the increase in house value has still left a great many families struggling with the burden of negative equity. Facing the threat of repossession, it can feel that you have nowhere left to turn. Severe debt problems can lead to the loss your home but there are steps that you can take to safeguard the roof over your family’s head.
Obviously, the pressure of mounting debt puts a serious strain on you and your bank balance but ideally, the threat of repossession can be limited if you protect yourself against sudden changes in your financial circumstances by building up some savings. Should that unforeseen situation arise, having this safety net can save you from the threat of repossession but you should always talk to your lender at the first sign that you will struggle to meet the repayment schedule. In the vast majority of cases, they will work with you to draw up a payment plan that you will find easier to service.
Of all of the events that can have a sudden and unforeseen effect on your financial situation, the threat of unemployment is no doubt the most pertinent. There is the option of unemployment insurance is option. In most cases, this will pay out a predetermined, fixed monthly amount in place of your salary. The premium is normally sold with accident insurance or similar and is usually about two-thirds of your net income. You can also just get cover for the amount of your mortgage. Chances are, if you’re self-employed or in a similar position, you won’t qualify for this kind of cover though.
Repossession is best tackled with immediate action. In response to the recent economic crisis, mortgage lenders have pledged to treat any homeowner in arrears sympathetically and positively. So, you should be able to come to an arrangement with them that allows you to reduce your monthly mortgage payments. You can do this in a couple of ways. The first is to lengthen the term of your mortgage and the second is to switch it to an interest-only loan, both cut monthly repayments in the short term. Also look at other costs and pay those items where non-payment has the most serious consequences.
At the same time as urging you to act quickly, the debt specialists at Debtsolver also recommend that you stay calm and not panic. Although your lender will get in touch when you miss your first payment but usually you’ll be afforded time to sort the situation out before it gets to the point of court involvement. Getting independent, impartial advice from a dedicated debt advisor like Debtsolver can help you to negotiate a new deal to keep a roof over your head.
There are government schemes, such as the Homeowners’ Mortgage Support (HMS) scheme, that can allow you to defer interest payments in the event of becoming unemployed. For advice on all of the factors involved in this awkward process, drop by www.debtsolver.co.uk.