If you’ve been made redundant, one of the first questions you may have asked yourself is how you’ll continue to pay your mortgage. Mortgage repayments are a large portion of most homeowner’s general expenses and losing your job can strain your ability to make these repayments.
But the good news is that if you’ve been made redundant, there is help available. Here’s what to do.
The first step is to check if you’ve got any protection in place that will cover you if you’re made redundant such as mortgage payment protection insurance . If you do, check your policy to see if you’re able to make a claim.
Your mortgage lender will be able to give you advice on how to pay your mortgage, and the different support options available to you. A popular option they may suggest is to take out a mortgage payment holiday, also called a freeze or a deferral.
What does this involve?
Taking a mortgage payment holiday means the pressure on your finances may be relieved in the short term. But remember, you’ll still be charged interest whilst you’re taking it. This means the overall amount you pay for your mortgage is likely to increase.
Also, taking a payment holiday could have a bearing on future lending decisions. Whilst this then may be an option to bear in mind if you’re struggling to make mortgage repayments, you should always consider the long-term implications of any financial schemes you take advantage of.
If you have lost your job, then ensure you claim any benefits you’re entitled to. There are online calculators that can help you see what you’re able to claim.
And if you’re on certain benefits and you’re struggling to pay your mortgage, you may be able to get help from the government to pay the interest. This is called Support for Mortgage Interest
get help from the government to pay the interest. This is called Support for Mortgage Interest
How SMI works:
When it comes to calculating how much they’ll pay, the government uses a standard interest rate.This may be different to the interest rate you’re paying on your mortgage. And bear in mind, SMI can only help pay your interest payments. It won’t pay off the capital of your mortgage.
And if you’re facing financial hardship it’s more important than ever to make the most of every penny you have.
Go through your monthly budget carefully and see where you can slash your spending.
Look at ways to maximise your income too (is there any temporary work you can get to keep you going while you’re looking for your next position?) Also have a clear out at home to see what you can sell that you don’t need any more to raise funds.
If you’re still worried about your finances then you can seek free and confidential debt advice from a debt charity such as Your Expert Personal Insolvency.
If you’ve lost your job and want to find out more about protection and insurance policies, or you just want a chat with people who are here to help, our expert protection advisers are always here.
For insurance business, we offer products from a choice of insurers.
Feel free to get in touch here.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.