If you find yourself not able to make your monthly mortgage repayments then the Government might be able to help you through its government schemes.Some of this mortgage schemes include the mortgage rescue scheme, the support for mortgage interest and other government schemes that can build up your income so you can pay off your monthly mortgage repayments.
Steps you should take if you can't make your monthly mortgage repayments.
Get free debt advice
Getting free independent advice before contacting your mortgage lender will arm you with the right information and put you in a different state of mind to deal with your mortgage lender. When seeking free debt advice you should consider
You should also check with the turn 2 us charity to see if there may be any benefits or grants to increase your income.
The easiest way to stay out of debt is to use budgeting tools and ensure you continuously switch your utility & credit bills to cheaper ones.
Tell your mortgage lender
Mortgage lenders want to see you make your mortgage repayments. After all it is in their best interest(no puns intended) to see you keep up with your monthly mortgage repayments. Once you tell your lender that you are having financial difficulty your mortgage lender will be able to suggest suitable options with you in order to help you get back to making your mortgage repayments.
Some of those options include;
- A mortgage repayment holiday
- Increasing your mortgage term
- Moving to interest only mortgages on a temporary basis
- A temporary repayment arrangement( e.g a discounted payment for a few months)
You mortgage lender might also introduce you to government schemes such as the mortgage rescue scheme and the support for mortgage interest.
The Mortgage rescue scheme
The mortgage rescue scheme is no longer available in England but still exists in Wales and Scotland.
The mortgage rescue schemes is targeted at those people who are current home owners but are at risk of going homeless due to not being able to continue making their monthly mortgage repayments. The scheme is operated by local councils and to get involved you will need to take your case to your local council and inform them of your situation.
Your local council will then put you in touch with a housing association who will look into your case and then decide if they can help you. If they can help you they will offer to either:
- Buy you complete home and rent it back to you
- Buy part of your home and become a co-owner with you
You can read more about the scheme here.
Home owners support fund
In Scotland the government operates a similar scheme through its homeowners support fund.
The schemes are only available to people who are struggling to repay their mortgage.
The home owners support fund helps homeowners in two ways:
The Government buys a stake in your home up to 30%. This means you have a lower mortgage as the government is essentially paying most off your mortgage off. You continue to live in the home and make lower mortgage repayments. This schemes is known as the mortgage to shared equity scheme.
The second option is the mortgage to rent scheme where the government buys your home and rents it back to you.
The support for Mortgage interest scheme
The support for mortgage interest scheme is targeted at those who receive income benefits such as universal credit , income related employment and support allowance or income support. The scheme will help you with the interest payments on your monthly mortgage repayment.
The scheme has since changed from a benefit to a repayable loan.
The support for mortgage interest scheme is a bit different in Ireland and you can find out more about this here.
Universal credit and Government Mortgage help
If you get universal credit you may also be eligible for government help with your monthly mortgage interest repayments.
You will only be able to get government mortgage help if you have no ‘earned income’, such as income from a part-time or full-time work, and you don’t get any benefits from your employer such as Statutory Sick Pay or Statutory Maternity Pay.
If you're eligible for this type of help then the government will make any payments directly to your mortgage lender and will be based on the interest you have on your outstanding mortgage. There is a maximum of £200,000.
You will need to wait 3 months before the payments will state and the payments will cease immediately after you begin to work again.