A home should be a place of safety and security, so if this is threatened in any way, it can impact our emotional wellbeing. If you’re concerned about rent and mortgage payments, potential rent arrears and why you might be struggling to remortgage, find out how to get back on track and alleviate your worries with our money experts at MoneyHelper.
Here is some advice to consider:
Identify the problem and work out a plan
Perhaps your income or expenses have suddenly changed for the worse because you’ve lost your job, or maybe your partner has moved out and stopped contributing to the rent. In other cases, it might simply be that you are living beyond your means. Either way, you will need a plan.
Being repeatedly late with your rent might lead to eviction and a bad reference from your landlord, which will make it difficult for you to find another property to rent. Your landlord might also withhold some of the deposit to cover underpaid rent if you still owe money when you move out.
Making a budget can help you find out where you’re spending your money and where you might be able to cut back. If it’s likely to be a long-term problem, getting help right away might be the best solution. Before matters get out of control.
Reducing your monthly expenses
Budgeting is essential if you’re struggling to meet outgoings. Here are just a couple of ways to cut back:
- Look at the Direct Debits that go out of your account each month – things like gym membership and magazine subscriptions. Now think about whether you’re getting value for money out of all of them. If not, consider cancelling them.
- Try listing the smaller non-essential items you buy each day – such as take-away coffees or drinks after work. Put them in order of priority. Pick off the lower priority items first and consider cutting them out one at a time.
If you can’t pay your rent, don’t ignore the problem. Talk to your landlord as soon as possible. Whether the problem is caused by a change of circumstances, a budgeting difficulty or a cut in benefits, you can take some important steps to help get yourself back in control and avoid eviction.
Talk to your landlord about your rent payments
It’s understandable you might be afraid of explaining you are going to be late with the rent. But it’s far better to get the issue out in the open before you actually fail to pay up.
When you speak to your landlord or housing association:
- Explain why you’re going to be late with the rent and ask for some extra time
- Be clear about what you’re doing to address the problem to help ensure it won’t happen again.
How to ask for support if you’re unable to make your monthly mortgage payments
Lenders have to treat you fairly and consider any request you make to change the way you pay your mortgage.
- Offer to pay back what you can afford when you discuss your options with your lender – continuing to pay back some money is better than paying nothing and will help reduce your arrears.
- Consider how and when you can return to making your full monthly payments.
- Think about when you can afford to pay more to make payments in excess of higher than your normal monthly payment to pay down any arrears.
Depending on your circumstances your lender might also make suggestions for you, for example extending your mortgage term. You can also use the benefits calculator to find out what you might be entitled to. Depending on your circumstances you might qualify for certain benefits – and/or for government help towards your interest payments.
If you’re struggling to meet your monthly mortgage payments, don’t delay – it’s important to get in touch with your lender as soon as possible.
Why can I not remortgage?
There are many reasons why you might struggle to remortgage, but most of these come down to you failing the stricter affordability checks brought in after you bought your property.
Often referred to as ‘mortgage prisoners’, these people can be stuck on higher interest mortgages, or their lender’s standard variable rate despite being up to date with their mortgage payments and not trying to increase their borrowing.
New rules introduced by the Financial Conduct Authority (FCA) might mean it is now easier, for some people stuck on more expensive mortgages, to switch. However, it’s important to understand not all lenders will offer this, and you will still need to meet certain eligibility criteria to remortgage.
Low credit rating – If you have a low credit score, you are less likely to be able remortgage. Even if you can remortgage, you are less likely to get a good deal and can face higher interest charges. Find out more about credit ratings here.
High loan value – The value of your property can go down, as well as up. This means when you come to switch your mortgage you could be assessed on a higher loan to value (LTV), which reduces you chances of successfully remortgaging. Read more here
Missed payment and mortgage arrears – If you’re currently in arrears on your mortgage, or have missed mortgage payments in the last 12 months, even if you’re no longer in arrears, you are going to struggle to remortgage, even under the new FCA rules.
If you work in the grocery industry, you can call our free, confidential Helpline on 08088 021 122 anytime of the day or night and speak to a BACP accredited counsellor who will provide you with immediate help. Plus, you may be referred to Citizen Advice Bureau trained information specialists who are available 8am – 8pm Monday-Friday to provide advice on any practical issues that may be causing you stress or worry.
You can also access GroceryAid’s Financial Wellbeing hub in partnership with MoneyHelper to find useful information and advice on topics including borrowing, credit ratings, pensions and how to save money on household bills.