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Can’t afford a mortgage

Author: Myles Robinson - Expert Finance Advisor

Posted: Jul 6, 2022

Can’t afford a mortgage? This is what to do:

Customers who cannot afford a mortgage often ask us questions. These questions don’t only come from first-time homeowners or homeowners who have difficulty paying their mortgage payments. They also come from people who cannot afford a mortgage.

No matter what your situation, we are here to help you.

You can contact us today for free mortgage advice, if you would like to receive specific advice regarding your current situation we are happy to help.

We will match you with an advisor who is experienced in finding affordable mortgage solutions for people in similar situations.

They will be glad to answer any questions you may have and can help you find the best products for the most affordable price.

We offer a service that is completely free of cost and without obligation.

We are expert mortgage brokers

We have access to over 200 lenders in the UK to get you the best rates

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Help! I can’t afford my mortgage. What should I do?

The unpredictable nature of life can cause financial problems with your household income. You may find yourself in a difficult financial situation if you are an existing homeowner.

There are many options, including specialist mortgage products, mortgage payment holiday, home owners support fund, support for mortgage interest rates, government schemes and personalised advice from our expert mortgage brokers.

Constitute financial advice today.

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Talk to your mortgage lender first

We get many calls from customers asking us questions such as “I can’t pay my outstanding mortgage balance this month.” We always advise them to first contact their lender.

There may be other options, but if this is a long-term problem, your lender might be willing to. Before you panic ensure to fo find some mortgage advice for mortgage support.

  • You can extend your mortgage term without remortgaging. This will lower your monthly repayments as the cost is spread over a longer time.
  • Grant you a payment vacation: This may give you some time to get your finances in order, but it can also have an impact on credit ratings.
  • Ask your lender to delay the payment. If you think your financial problems will be temporary, your lender may allow you to defer your mortgage payment for a certain period and then make up the difference at a later date.

What are your options if you cannot afford to make mortgage payments?

Don’t panic if you can’t pay your mortgage payments. There are five options available to you.

  1. Remortgaging
  2. Reverting to interest only
  3. Transfer of product
  4. Equity release
  5. Government schemes

1. Remortgaging

Remortgaging is a way to refinance your mortgage. This can be done if you are unable to afford the mortgage payments. You are likely to get a better rate if you remortgage, at least for the short term. This will make your mortgage payments more affordable and less expensive.

You can also remortgage to reduce your monthly mortgage payments and make it more affordable. You can reduce your monthly payment by spreading out the cost over a longer time period, subject to your credit report, income, and age.

Consolidate your debt by remortgaging

You might feel the pinch from your mortgage payments but it could be other debts that are causing financial pain. To lower your monthly expenses, you might consider debt consolidation.

Keep in mind that if your initial deal is still valid, you may have to pay an early repayment fee and other fees related to remortgaging.

Securing additional debt against your house is a significant financial decision that should not be taken lightly, this is known as a secured loan.

Before you commit to any financial arrangement that involves securing your home’s debt, get independent expert advice. To speak to one of our expert mortgage brokers, submit an enquiry today. As a mortgage company, we will offer free mortgage advice to help your personal finance problem affecting your mortgage payments.

We will match you with a lender who is experienced in helping people consolidate and remortgage their debts. They will be happy to answer any questions you may have and inform you about your options. This service is completely free of charge and you are under no obligation.

We often hear the phrase I can’t pay my mortgage, most lenders will be happy to help and offer situations such as a repayable loan or mortgage holiday.

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Second-charge mortgages

A second charge mortgage could be a viable option if you are tied to your current lender or don’t wish to lose your favourable interest rate but still need to pay off debts in order to improve your financial situation.

There are many options for remortgaging. If this is what you want, talk to one of our expert brokers and they will help you navigate the process.

To get started, submit an enquiry today.

2. Change to interest-only mortgage repayments

Assuming that you are on a capital repayment mortgage, converting to an interest mortgage.

A deal with the same lender or a different lender might be possible.

An interest-only mortgage allows you to pay only the interest each month, and the loan is due in full at its end. While this can result in lower monthly payments, you will need to prove a viable repayment plan before the loan is finalized.

3. Transfer of product

You could also consider a product transfer.

You may be eligible to switch to a fixed-rate mortgage with your current lender if you have been moved to the standard variable rate (SVR), of your lender. This would be assuming that you want to keep the loan amount the same.

A product transfer is a better option than a remortgage because you won’t be subject to a full appraisal and there aren’t usually any complex legal processes, making it a more affordable option.

Product transfer rates may be higher for new customers than they are for existing customers. Talk to a mortgage broker who is experienced in all aspects of the market, such as the one we work with.

Contact us today to speak with an experienced broker in mortgage transfer products. We’ll match you up with one who can help you determine the best option based on your specific circumstances whether you are struggling to pay your mortgage, meet repayments or have. missed a payment.

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4. Are you 55 years old or older? Take into consideration equity release

Equity release, also known as lifetime mortgage allows seniors over 55 to withdraw cash from their property. This means that you don’t have to move or face any unwelcome upheaval.

There are usually no monthly payments (or you can choose a lower fixed rate). After the property is sold, the outstanding balance will be repaid. This can happen when you move later, enter residential care, or die.

5. Government schemes

If you are struggling to pay your mortgage, there are many government programs that could help.

The Support for Mortgage Interest (SMI) is a benefit in England that was changed to a loanable repayment loan in April 2018.

SMI is only able to help with the interest that you pay on top of your mortgage payments. It cannot assist you with the actual repayments. You can repay it if you sell your property or transfer ownership. Learn how you may transfer your mortgage using our standalone guide.

To be eligible for an SMI loan, you will need to have benefits. The government website has more information about the scheme.

SMI is administered by the Welsh and Scottish governments.

Get free advice from one of our expert advisors if you have missed payment or you are having trouble paying your mortgage.

We’ll help you solve your mortgage problems by matching you up with an expert.

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What happens if I get divorced and cannot afford my mortgage?

If you are divorcing and your name is on the mortgage, you will be required to continue paying your bills even if your property has been sold.

If you or your partner decide you don’t make payments anymore on your joint mortgage, it can affect both your credit ratings. You each agreed that you would be responsible for the debt when signing up for the loan so you should both accept liability.

There are options if you don’t have the funds to pay your mortgage anymore.

  • Transferring the mortgage to your partner’s name alone (which may not be the best option if you plan on continuing living in the property). This request should be made to your lender, but they are not required to grant it.
  • If you plan to stay in the property, you can remortgage.
  • You can take out a product transfer.
  • Ask your lender whether you are eligible to switch to an interest-only mortgage.
  • For more options, see the opening sections of this article.

Divorcees who can’t pay their mortgages on time will not receive any assistance from the government or the mortgage lenders. However, you can make an enquiry to speak with one of our expert mortgage advisors. This will give you a no-obligation chat about your options.

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What happens if I am on maternity leave?

If you are unable to afford mortgage payments due to a fall in your income during maternity leave, many of the same options will be available to you. However, it is important to first contact your lender to let them know that you are having difficulty paying your mortgage repayments while you are on maternity leave.

Your mortgage lender may offer you a payment vacation or adjust the term length in these cases, but there might be other options such as lowering the mortgage repayments for a period of time.

What happens if my partner dies?

No matter what will you have, if you are in a joint mortgage, the mortgage debt will not automatically transfer to your name.

For this, you will need to contact your mortgage lender. Your lender will need to conduct affordability checks. They will only approve the transfer if you are able to prove that you can afford the mortgage.

In this circumstance, some borrowers turn to savings, life insurance policies or mortgage payment protection insurance. If this is not an option, please take a look in the opening sections of this article or contact us today to speak with one of our specialist advisors.

We will match you with a broker that we work with to ensure they have the expertise and experience to help people in similar situations. They will be glad to answer any questions you may have and provide the advice that you require.

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What happens if I cannot afford my second mortgage payment?

Many of the solutions we have discussed in this article can be applied to homeowners who struggle to pay their mortgage on a second house. For more information, see the sections that open.

This is a common scenario where borrowers have remortgaged their homes onto a buy-to-let agreement and used rental income as a way to pay the mortgage repayments. Our dedicated page on buy-to-let mortgages contains more information about BTL mortgages.

What happens if I don’t have the money to buy a house?

Customers often tell us that they don’t have the money to buy a property. However, this is not always true.

Borrowers with limited incomes have a variety of options and products that can help.

  • Mortgages for low income
  • Help to Buy
  • Shared Ownership

These are just some of the possible options if you feel you may be denied a mortgage due to affordability. Talk to a mortgage broker to learn about other options.

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How to increase your financial flexibility

There’s a possibility that you may have approached the wrong lender, or used the wrong broker if you were told that you don’t have enough income for a mortgage. While most mortgage lenders won’t allow you to borrow more than 4.5 times your annual income, you can get a mortgage provider that doesn’t insist on this limit.

Lenders offer mortgages that are based on five times or more income. If you have the right circumstances, they might even be able to provide mortgages up to six times. However, it is possible to find these lenders without the assistance of a broker.

Use an online mortgage calculator to find out how much you can borrow based upon 5-6 times your salary.

Talk to a mortgage expert about your financial situation today

Call today if you have any questions regarding mortgage affordability or to make an online enquiry.

We will match you with a broker who has experience in similar cases to yours. They will be glad to answer any questions you have and provide information about all options available to you in order to get the mortgage that you desire.

Our service is completely free and there are no marks or obligations on your credit rating. Contact us now as there is no fee if you get a mortgage through one of our brokers.

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