Paying your mortgage if you are made redundant: what you need to know
Being made redundant can be an extremely worrying experience, and if you have a mortgage to pay, one of your first thoughts is likely to be ‘how will I continue to make the payments and will I lose my house?’
But all is not lost and if you have recently been made redundant - like so many others given our current economic climate - then there is plenty of help available. Here’s what to do.
Speak to your lender
Your mortgage lender will be able to provide advice on how to pay your mortgage and the different support options available to you. A popular option they could suggest is a mortgage payment holiday (also known as a freeze or a deferral).
What does this involve?
A mortgage holiday means you have a limited period of time within which you do not have to make mortgage payments. You can request a payment holiday of up to six months in total.
Coronavirus-related mortgage payment holidays can be applied for up until March 31. Under this scheme, any payment holidays must end by July 31, 2021.
It is worth remembering that a payment holiday might relieve the pressure on your finances in the short term, but you’ll be charged interest while you take the payment holiday. As a result, this means the overall amount you pay for your mortgage is likely to increase.
Also, taking a payment holiday can affect future lending decisions so you should always consider the long-term implications of any financial schemes you take advantage of.
Check if you have mortgage protection
One of the first things you can do is to check if you have any protection or insurance that covers being made redundant (mortgage payment protection insurance, for example). If you do, then check your policy or call the provider to see if you’re able to make a claim.
Claim any benefits you are entitled to
As soon as you lose your job, one of the first steps you can take is to ensure you claim any benefits you’re entitled to. There are online calculators that can help or you can speak to Citizens Advice for support.
If you are on certain benefits and you’re struggling to pay your mortgage, there is also a government scheme available called Support for Mortgage Interest (SMI) that may be able to help.
Do everything you can
And if you’re going through some financial hardship, it’s important to make the most of every penny you have. Going through your monthly budget to see where you can make regular savings is a really good place to start.
Look at ways you can maximise your income too (for example, is there temporary work you can get to keep you going while you’re on the hunt for your next role?).
Even having a clear out at home and selling anything you no longer need could raise some funds.
Don’t be afraid to ask for help
You can get free confidential money and debt advice from a debt charity such as StepChange and National Debtline.
If you have lost your job and want to find out more about protection policies, or you could just do with a chat and some general mortgage advice, we are always here. Get in touch with me on 07375 886347 and I’ll be happy to help.
Or visit our website at mortgageadvicebureau.com/cambridge.
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