For many homeowners, the last few months may have led to something of a shock, particularly if you are on a tracker or standard variable mortgage deal.
Ever since the moment that has since gone down as the September 2022 Fiscal Event, mortgage payments have fluctuated for many borrowers, and combined with other cost of living increases has caused people previously comfortable with their payments to start to struggle.
If you are one of the many people worried about going under, it is essential that you let your lender know as soon as possible. Asking your lender about your options will not affect your credit score, although taking some form of mortgage support can have an impact.
New FCA guidance has been published that has set expectations on the types of support that should be offered to homeowners irrespective of whether they are up to date with mortgage payments or not.
Once a lender is aware, they will do an assessment of your outgoings and income, and offer a few options to help your immediate situation, although exactly which ones will depend on your overall circumstances.
The first is to offer a switch to an interest-only mortgage, which would cause an immediate reduction of mortgage payments and ensure that the total amount that needs to be paid off would not increase, although this is almost always a temporary solution whilst you get in a better financial position.
You can also be offered a temporary break from paying anything off, although it is important to bear in mind that interest can build up during this time and it will mean paying off more at the end of the payment term.
Finally, the term of the mortgage can be extended, which whilst it will lead to greater repayments overall, will lead to lower monthly repayments, but this could lead to an affordability assessment if you want to shorten the loan term again.
For more advice about mortgages in Liverpool get in touch today.