Mortgage rescue relief
Question
I have a suspended repossession order and a secured loan, both of which are becoming increasingly difficult to pay. I live on my own with my daughter and have just increased my hours at work. I don't go out, have cut back on everything, and yet I only just manage to scrape by.
My situation is becoming ever more difficult and frightening. Would it be possible to sell my home and rent it out by taking out a mortgage rescue scheme? I don't want to move as I suffer with depression and wouldn't be able to cope.
Answer
Mortgage rescue schemes are usually run by the council or housing associations, unfortunately there are very few mortgage rescue schemes in the country. You could speak to your local council or housing associations in your area to see if they have such a scheme.
Many homeowners have problems paying their mortgages. You need to act quickly, even if the problems are only temporary. If you don't, you could risk losing your home. Keeping up with your mortgage payments should be your top financial priority. If you can't afford to make the full payment, pay what you can.
Have a look at your outgoings and see if they can be reduced in any way. If you have other debts such as credit cards or loans, get some specialist debt advice. It may be possible to reduce these payments so you have more money available to pay the mortgage.
See whether there are any ways you could increase your income. Some people are able to take on extra work. Others choose to let a room to a lodger. You could also check whether you're getting all the benefits you're entitled to. Your local Citizens Advice Bureau (CAB) should be able to advise you on benefits.
If you have an interest only mortgage (linked to an investment such as an endowment policy or ISA) it may be possible to reduce your monthly payments to make it more affordable. If this isn't possible, you may be able to sell your investment to pay off some of your arrears or switch to a more flexible mortgage. You will have to negotiate to get your mortgage company to agree to any changes, and you normally have to pay an arrangement fee.
If you're on income support you may be able to get some help to pay the interest on your mortgage. However, you have to wait several months before you become eligible for these payments.
If you think you are likely to have problems sticking to the conditions of your Suspended Possession Order (SPO), you should contact your lender and/or get advice immediately. Don't put off dealing with the situation, as your lender (or other creditor) may be able to evict you very quickly if you don't come to an agreement.
If you're unable to resolve the situation, you may not be able to keep to the terms of the SPO. If any of the terms of the SPO are broken, your lender can apply to the court immediately for a warrant of possession to be executed by the court bailiffs. They can do this without having another court hearing.
If you get to this stage, you may be able to apply to court to change the terms of the order. You will need to apply to the court by filling in a specific form. You may also have to pay a fee (although if you are claiming benefits or have a low income, you may not have to pay this). However, you must act quickly and get help with this.
If it seems likely after exploring your options that you still won't be able to meet your mortgage payments you may want to consider selling your home. If you're thinking of selling your home you should negotiate with your lender for more time to carry out the sale. It is still important to continue to pay as much as you can towards your mortgage. If you don't pay, your lender may decide to take you to court to evict you.
If things don't work out and you face losing your home, you may be able to get help from the council. Because you've got a child, they may have a duty to house you if you're made homeless. If it reaches this stage, get further advice about your options by speaking to a local advice service about this. An advisor may be able to help you negotiate with your mortgage lender and see what action you could take next.
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