Job loss is something every mortgage borrowers dreads – but what do you do if this fear becomes a reality? Darren Polson helps a homeowner who has been made redundant
The Question
I would like some advice please as I am in a bit of a difficult situation. I have heard this week I am being made redundant from my job. I am homeowner and co-own my property with my wife. However, she works part-time to help manage our childcare costs and I contribute the majority of repayments to the mortgage.
We have calculated I should receive a small redundancy payout which will keep us afloat mortgage-wise for six months. We also have some savings. But what happens after this? I am already looking for a new job but there are no guarantees I’ll find something within six months.
Please could you advise on what I should do. Should I tell my mortgage lender, or would this put me in a worse position? Is there a way of reducing my payments or taking a mortgage holiday?
Darren’s Answer
This sounds like a worrying situation for you and your family. Financial stress like this can feel overwhelming but try not to panic as there are steps you can take to protect your home, or at least reduce the pressure.
Firstly, take a step back and assess your finances.
Look at your outgoings and see where savings can be made, reviewing all regular payments such as direct debits, standing orders and subscriptions, as well as your last few bank statements. This will help you see where you are spending most. This is something I recommend all clients do annually, but this is a good time to review.
There is a lot of help available for your mortgage and you also have six months of security to be able to find a new role.
If your circumstances impact your ability to repay your mortgage, then a discussion with your lender is advisable, where they will discuss the support available.
Mortgage holidays and payment reductions vary lender to lender but there will be options available if you are in financial difficulty.
Looking at your mortgage, it may be worth reviewing when it is up for renewal. For example, you could increase the term which would make your payments lower.
If you are within six months of your mortgage product’s expiry, speak to a mortgage broker who can review your options.
Review where you are and speak to your lender for advice on the options they can provide.
Meet our expert…
Darren Polson is head of mortgage operations at Aberdein Considine. He has been a regular columnist for what MORTGAGE for over three years and is here to answer your questions.
If you have a question for Darren please email kate.saines@emap.com or leave a message in the comments below.
