Homeowners struggling to pay their mortgage have been thrown a lifeline from the Financial Conduct Authority (FCA).
Lenders must have tools available to help borrowers who have missed payments or may not be able to make payments in future.
This means a lender could extend the term of their mortgage. Or they could make arrangements for the borrower to reduce their monthly payments for a short period.
The aim of the FCA’s guidelines is to relieve pressure on those struggling with rising prices as the cost of living crisis continues. And it is urging anyone who is worried about not meeting mortgage repayments to speak to their lender as soon as possible.
Why is help available now?
Following studies by the FCA, it has warned that more than 350,000 mortgage borrowers could face payment difficulties by the end of June 2024. Among this group, people on a fixed rate deal could end up paying up to an extra £340 a month on average.
Borrowers aged between 18 and 34, it says, are most likely to be financially stretched than the rest of the working population.
In light of these figures, the FCA believes that lenders should be offering a helping hand. Its leaders met with major lenders and consumer representatives last year to draw up guidance about helping borrowers struggling to meet their mortgage payments.
What to do if you’re struggling to pay your mortgage
The guidance from the FCA is welcome. It recognises the impact the cost of living crisis is having on borrowers. Here’s our advice.
- Speak to your lender or broker as soon as possible. If you think you are going to struggle to meet payments, speak to your lender or broker. They can help you access debt advice and can look at your options.
- Consider your options. If you need to remortgage soon, speak to your broker. They will look at comparing deals to find the most competitive mortgage for you. Even a small saving can be the difference between affordable repayments and struggling with your mortgage repayments.
- Don’t be embarrassed to ask for help. Admitting you have financial problems can be embarrassing but don’t be afraid to ask. In the current climate, you really aren’t alone and even the most prudent people can struggle in such times. The sooner you get help the sooner you’ll receive guidance and peace of mind.
What can we do?
Our team never judges anyone and with the rising interest rates and price of food and other items increasing, it’s easy to see how this is impacting people.
So, if you would like advice about remortgaging, please contact our team today. If you’re already a client of The Mortgage Dog and need us to speak to your lender, contact us as soon as possible.