Lenders work out how much we can borrow based on salaries. So how do they react when two-incomes become one because of redundancy? Independent mortgage adviser Hayley Buck has years of experience arranging loans for Chiswick properties. Here she advises on breaking the news to lenders.
Should we tell our lender or keep it to ourselves?
As long as you can still afford your payments then there is no need to contact your lender. But if, for example, you are on a 'repayment mortgage' and the payments are no longer affordable, it may be worth calling your lender to ask if you can switch to an 'interest only' mortgage. Your monthly payments will be reduced but you will no longer be paying off any of the mortgage balance.
Will we lose our home if we skip a mortgage payment?
Not if you miss one mortgage payment. But if you do not address the issue with the lender and continue to miss payments they will start repossession proceedings. This normally happens after three consecutive missed payments.
If we can’t pay, will this prevent us getting another mortgage in future?
Yes. If you miss mortgage payments, this will be registered on your credit file, and will lower your credit score. If you miss more than two payments a mainstream lender may not be able to lend. Mortgages available for those with adverse credit can be very expensive in the current market.
Should we approach another lender?
If you apply for a re-mortgage deal with a new lender, with only have one income rather than two, they may not be able to lend you the amount you need. You would have to remain on your current lenders standard variable rate until you were in a position to apply to a new lender.
Contact Hayley Buck for further advice.
Click here for Government advice on keeping your home in the event of mortgage worries.
