AS part of their campaign to help people manage their debts and stay in their homes in 2010, Thurrock Citizens Advice Bureau is publishing the following top tips urging people to prioritise mortgage repayments, explaining what help is out there and the reiterating the importance of seeking help and advice early.
Manager at Thurrock Bureau Mike Rawlings said:
“Every year, we see a huge increase in debt problems immediately after the Christmas period. Payback time usually hits hardest in the spring, when credit debts have to be paid off and the big winter bills are coming in. But it’s vital you prioritise your Mortgage payments to ensure you stay in your home.”
“If you are falling behind with payments on a mortgage or secured loan you should speak to your lender straight away. Lenders should negotiate with borrowers, but if you are having problems, make sure you seek free, confidential, independent advice without delay. Receiving court papers doesn’t mean that you are automatically going to lose your home. Getting advice, even at a late stage, can help the majority of people come to a workable agreement with their mortgage lender and can make all the difference between saving or losing their home.”
Here are some top tips for anyone worried about paying their mortgage:
1 Work out your finances
Before you decide on what course of action is best for you, make sure you know where you stand financially. Make a list of all your income and outgoings and any debts you have. Are you spending money on things you could easily do without?
You can find factsheets and budget sheets at www.adviceguide.org.uk
If you need help working out your finances, go to your local CAB.
2 Are you insured?
If you have recently lost your job or become too ill to work, check to see if you are covered by mortgage payment protection insurance – also known as accident, sickness and unemployment insurance. If you have problems claiming on your insurance, you can get advice from your local CAB.
3 Can benefits help with mortgage payments?
You may get help with housing costs such as mortgage interest payments if your income and savings are low enough and you are entitled to income support if you are a carer or single parent with a child under 10 (for new claims), income-based jobseeker’s allowance if you are looking for work, income-related employment and support allowance if you cannot work because of illness or disability or pension credit if you or your partner are 60 or over. Check with your local Jobcentre plus or the pension credit claim line (for pension credits) on 0800 991 234 to see if you are eligible. If you can get help, ask your lender if they will accept just these payments until your situation improves.
4 Could you get a better deal?
You may be better off switching to a new mortgage deal. The FSA’s website
www.moneymadeclear.fsa.gov.uk has more information about the different types of mortgages including a mortgage calculator. Or you can phone them on 0300 500 5000. Make sure you know what the total cost of the new mortgage will be, including any charges made for switching. Get independent advice if you are unsure about anything.
5 Talk to your lender
Most lenders will be willing to discuss other solutions to help you through a difficult time. For example, you may be able to:
• make reduced payments or pay interest only temporarily. Don’t forget you will have to make up payments at a later date
• increase the period of time of your mortgage. This will reduce your monthly payments but you will end up paying for longer so it will cost more.
Make sure you fully understand what any changes to your payments mean and what it will cost you. An experienced money adviser will be able to go through these with you.
6 Increase your income
Is there any way you could increase your income to help you pay your mortgage? Here are just a few ideas:
• Find out if you can claim any benefits or tax credits.
• Take in a lodger. Before renting a room, check if the extra income will affect any benefits you get and make sure your landlord or mortgage lender agrees.
• Check if you could get a grant to help with energy efficiency, fuel costs, and home insulation.
• Rent out your garage.
7 Reduce your essential outgoings
Is there anything you can cut back on until your situation improves? Reducing your monthly outgoings will make it easier for you to manage your mortgage.
For example:
• find out from your local council if you are entitled to a council tax reduction
• ask your local council if you’re entitled to free school meals for your child or help with the cost of school uniform
• get help with health costs such as prescriptions and dental treatment
• you might save money on household bills by switching to cheaper fuel suppliers or insurance providers.
8 Help from government schemes
The Government has introduced schemes to help homeowners:
• If you have suffered a temporary drop in income, the homeowners mortgage support (HMS) scheme lets you postpone paying some of your monthly mortgage payments for up to two years. If your mortgage lender is not part of the HMS scheme, they may offer a similar scheme.
• If you are facing repossession, the mortgage rescue scheme (MRS) in
England allows you to sell your house but continue to live in it and pay rent.
Similar schemes are available in Wales. Ask your local council.
As well as government schemes, private companies may offer similar sale and rent back schemes. Think carefully before signing up to one of these schemes as you may end up worse off. Get free independent advice first.
To find out more about government schemes, visit HYPERLINK “http://mortgagehelp.direct.gov.uk” http://mortgagehelp.direct.gov.uk
9 Get help
If after taking the above steps you find you are still struggling, don’t give up there are still plenty of things you can do. Carry on paying what you can afford and tell your lender why you can’t pay the full amount.
10 Useful contacts (check call rates before dialling)
Community Legal Advice www.communitylegaladvice.org.uk
free legal help, adviser search, legal aid calculator (England and Wales)
Helpline: ✆0845 345 4345
Consumer Credit Counselling Servicewww.cccs.co.uk
free, confidential debt advice
Helpline: ✆0800 138 1111
Directgovwww.direct.gov.uk
online benefits adviser, how to claim benefits, find your local council
Financial Services Authoritywww.moneymadeclear.fsa.gov.uk
interactive tools for budgeting and borrowing, information and leaflets
Helpline: ✆0300 500 5000
Health costs advice line: ✆0845 850 1166
HM Revenue and Customswww.hmrc.gov.uk
income tax, national insurance, tax credits
Tax credits helpline: ✆0845 300 3900
Home Heat Helpline www.homeheathelpline.org.uk
advice on energy efficiency and fuel debts:
Helpline: ✆0800 336 699
Jobcentre Plus www.jobcentreplus.gov.uk
benefits for people of working age
Benefit claim line: ✆0800 055 6688
National Debtline www.nationaldebtline.co.uk
free independent debt advice line: ✆0808 808 4000
Payplan www.payplan.com
free debt advice: ✆0800 280 2816
Shelter www.shelter.org.uk
housing advice including arrears and court action
Homeowner helpline: ✆0300 330 0515
General helpline: ✆0808 800 4444 (England and Scotland),
✆0845 075 5005 (Wales)
