For most home owners their monthly mortgage payments will be their biggest regular expense. With austerity continuing to bite, keeping up with the payments may become difficult or even impossible for some people.
The ongoing squeeze on family finances means many of us have less money to spend each month. Benefit and wage freezes and even salary cuts for some, combined with increasing prices for basic needs such as food, utilities and petrol mean it can be hard to make ends meet.
How to save money
It’s vital to keep up your mortgage payments if you can, so look for ways to save money in other areas. This can mean having to prioritize spending in a way that you might not have had to do before.
Take a good look at the household budget and work out how you can free up more of your money. Non essentials such as subscription TV channels and gym memberships can be cancelled (but check your contract first) while extras such as take away meals and even the occasional night out might all have to go.
Check your grocery bill for ways to save. Swap from brand names to supermarket own labels and make more of your own food, which is cheaper than buying ready meals. Turn the thermostat down a degree in the winter to help keep fuel bills in check.
While money is tight don’t be tempted into buying anything new unless it’s absolutely essential and don’t take out loans or credit deals to finance new products which will only add to your debt.
If you do have other debts that you are struggling to manage then talk to a specialist money adviser. They might be able to set up reduced payment arrangements for unsecured debts such as personal loans or credit cards which will then release some money that you can put towards paying your mortgage.
Talk to your lender
For some people money saving measures simply won’t be enough. If a breadwinner has lost their job then it’s very difficult to make up the shortfall in income simply by cutting back on household expenses.
It’s important to contact your lender as soon as you know you are struggling to pay your mortgage or if you anticipate that a problem may arise i.e. the threat of redundancy. They’ll have a special department with experienced staff who may be able to help.
Depending on your circumstances there are a number of options your lender might propose. For example they could agree to reduce your mortgage payments for a set time. If you are on a repayment mortgage they might only charge you interest. This will mean smaller monthly payments but you won’t be reducing the capital amount borrowed.
Another option could be to give you a payment holiday. You may be able to extend the term of your mortgage which has the effect of reducing your monthly payments but will cost you more in the long term.
Of course all this can put an incredible strain on families and it’s no surprise that many couples will really feel the pressure and may even separate. If you need legal assistance for family law Liverpool solicitors can help you at this very stressful time.
If your financial circumstances don’t improve, for example you can’t find another job, then it may not be feasible to continue living in your home but your lender may agree to you staying there while it is sold and you look for somewhere new to live.