I Can’t Afford My Mortgage Payments, What Can I Do?

Coming to terms with the fact that mortgage payments are no longer realistically possible to maintain is an extremely important step to take. People see it as “defeat”, and it’s never easy to admit defeat, especially when you have a fighting spirit. But don’t think of it as “defeat”, think of it as “surviving”

Giving up on something as important as a home can be the most difficult decision you’ll ever have to make, especially if you’re responsible for a family. But this important decision could save the livelihood for you and your children.

There’s no room for stubbornness

The worst thing you can do in this situation is “hope” things work out for the best. Things rarely work out for the best when you’re relying on hope alone, especially in these situations. Letting the concept of “hope” fester in your mind is a common mistake made by thousands, and before you know it they’re receiving repossession notices. If you know you can’t make your payments, then it’s time to start making some changes.

Spot the early signs

You will know immediately when you’re struggling financially, because it’s not a hidden or cryptic puzzle. If you can’t afford something, you can’t afford something, it’s as simple as that. As soon as you experience difficulties with your mortgage, you need to ask yourself one question: “am I just having one bad month, or is this the start of many to come?” Like I said, there’s no room for stubbornness when you’re talking about something so important.
It’s easier to adjust or turn things around at the early stages of a problem; once you’re in deep, crawling out can be a painful struggle.

What are my options?

Rent to Rent

What do I mean by ‘rent to rent’? Basically, consider renting your house out if you know your rental income can cover your mortgage payments, or at least cover the majority, so you can cover the shortfall. Meanwhile, you can move into rental accommodation that is within your budget. This solution offers you the luxury of keeping your home and gives you the opportunity to get back on your feet.

Sell to rent

If you know you won’t fall into the negative (red zone) after the sale of your home, you could move into rental accommodation. Regardless of whether you make or lose money with the sale, you should receive a huge chunk of change. That’s a better option than getting repossessed.

Switch to interest-only

If you’re currently on a repayment mortgage plan, you might want to consider switching to an interest-only plan. Most lenders allow you to switch between mortgage payment types quite easily, although there maybe an admin fee involved for switching. This can reduce the amount you pay each month significantly. Once you’re in a better position, you can easily switch back to a repayment plan.

Lengthen the period of your mortgage

A lot of lenders now allow you to lengthen the period of your mortgage. So for example, if you have 15years left on your mortgage, you may be able to stretch it to 25 years. Your monthly payments will decrease significantly; however, you will end up paying a lot more interest over the lifespan of your mortgage. The illegibility of this offer will also depend on your age.

Downsize your home

Perhaps you’re living in a property that surpasses your actual requirements. If you have a 3 bedroom where only 2 bedroom are occupied, downgrading to a 2 bedroom might be a wise move.

Relocate

House prices can drastically vary, even with in a range of 15miles. Relocating doesn’t have to mean moving to the other side of the country. And more often than not, you can get a lot more for your money if you move a few streets over. Relocating cannot only provide you with the opportunity to get some spare cash, but can also provide you with bigger living space.

Get a lodger

If you’re comfortable with the idea of having someone else live with you, why not consider getting a lodger for that extra income? A lodger can easily cover half of your monthly mortgage payments. Lodgers can be extremely useful, not only with the bills, but also for companionship and extra security.

Remortgaging

I personally believe that not enough people remortgage. The mortgage market is extremely competitive; consequently hundreds of lenders are constantly trying to provide better consumer deals. Being loyal to a mortgage lender is like being loyal to a shark- it’s pointless because you’ll get eaten regardkess. If you’re able to remortgage without being penalised, consider seeking advice from a mortgage broker, he/she might be able to save you thousands of pounds per year on your payments.

The important thing to remember is that all these options provide you with temporary solutions. Once you’re in a better position, you can get back inline to your former living environment, or even surpass.

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10 Comments- Join The Conversation...

Guest Avatar
k campbell 10th January, 2010 @ 22:34

My son lost his job due to drug abuse; currently is in drug rehab. He is not coming back to this area; I found someone to move into his house just for the mortgage payments. We have tried assumption; but the mortgage company will not work with us. The payments, taxes, insurance are current. Are the mortgage payments being paid by someone else be considered income for my son?

1
Guest Avatar
jools 11th January, 2010 @ 07:44

If you are renting his house then it will be seen as income but dont forget that you can take off mortgage interest and other working expenses. Would suggest you speak to an accountant or tax advisor.

Jools

2
Guest Avatar
marc dorrington 31st October, 2010 @ 10:34

i own a house which i rent out in london but have moved to australia to be closer to my daughter. my tenants lease has run out and am now having to pay mortgage for an empty house. i have tried selling and renting house but market very slow and cannot afford to keep paying mortgage.

id loose money on house even if it did sell. am not intending to come back to the uk for many years but at the same time do want to go back and dont want to be seen as running away from my problem.

any suggestions?
many thanks.

3
Guest Avatar
Donna 3rd April, 2013 @ 11:38

We have a mortgaged house and moved out to rent due to a army move. My husband is in the army. We still can't afford the mortgage repayments. Do you think it's best to sell the house to an invester and just continue to pay the rest of the mortgage of that we will still owe.?

4
Guest Avatar
carol 6th May, 2014 @ 15:27

I cannot afford my mortgage any more.My house is on the market at the moment for £109.950, which I owe £100'000 to my lender. Got about £10.000 equity. Need help in what to do
What can I legally do.
Do I just walk away

5
Guest Avatar
Fiona 19th November, 2014 @ 13:18

I currently owe around £10,000 on my mortgage with 2 years left. My fixed rate is ending next month and i am struggling due to loosing my job. My lender won't allow me to lengthen my mortgage to reduce my payments as I am unemployed at the moment and all other avenues have closed to me. I must make the payments or loose my home. My mortgage cost less than rent in most areas (purchased from my local authority) and if I sold up I would be in a worse position. Is there anything I can do? I'm so close to being mortgage free, but just can't afford it right now.

6
Guest Avatar
Carol 19th November, 2014 @ 13:24

I can't afford my payments anymore and I have no mortgage insurance. My lender won't allow me to remortgage as I'm self employed with very little profits. I'm about to be repossessed. I could afford reduced payments but they won't allow it. I thought they were supposed to help those struggling

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The Landlord Avatar
The Landlord 19th November, 2014 @ 18:26

Have either have you considered getting a lodger (assuming you have a spare bedroom)?

8
Guest Avatar
Christina 3rd May, 2015 @ 11:42

I am having mortgage problems too. I owe just under £6000 and I can't pay it. I have never missed a payment but my bank won't budge because the amount is so low. They say I can't renegotiate the loan as it's under £6500.
I only have a one bedroom flat so a lodger is not possible. I'm really struggling. I don't have anywhere else to go if I am repossessed and I'm so near the end of my loan. My local council housing list is through the roof. They say a waiting list of 20 months or more is usual, even in my desperate situation. I have a terrible credit rating with other defaults because I've been struggling to pay my mortgage as a priority.
Do I have any options left open?

9
Guest Avatar
Joanna 8th February, 2016 @ 14:36

I took voluntary redundancy in 2015. I have had a couple of jobs since but nothing permanent. I have a mortgage of £120000. I have asked the lender, they gave a month and moved my mortgage payment to the end of the month in the hope that I will find work.
I'm so stressed out, what can I do??

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