Tips for stressed home-owners

The possibility of losing your home because you can’t make the mortgage payments can be terrifying. Perhaps you’re having trouble making ends meet because you or a family member lost a job, or you’re having other financial problems. 

If this is happening to you and you can’t meet your mortgage payment obligations do not ignore the problem. It is important to consider all options and act decisively before you lose your home. 

Contact your lender

 If you think you’ll miss a mortgage payment, get in touch with the lender quickly. Your broker can do this for you which may take some of the stress out of the situation. 

Some lenders allow you to take a “loan repayment holiday” or “mortgage holiday” for up to three months. During this period however the interest on the loan will continue to accumulate and at the end of the repayment holiday, you will need to extend your current term, increase your repayments or make a lump sum payment, to make up the payments that were missed. If you don’t then you’ll pay more in interest overall. Repayment holidays are best used only as a last resort. 

Reassess your budget

Put together a budget to see where your money is going. Scrutinize your budget closely. Establish “wants vs. needs” expenses and look for ways to reduce unnecessary spending. 

Seek government help

If you are struggling to make your mortgage repayments due to redundancy, as well as the unemployment benefit, you may be entitled to special redundancy help from the government’s new ReStart package. Contact Work and Income or visit their website for more information. 

If you have received a redundancy payment, you may also be entitled to a redundancy tax credit from Inland Revenue. 

Check your insurance

Some insurance companies offer a relief package to clients made redundant, or self-employed clients who are made bankrupt, which may allow clients to suspend their premiums for a period while they remain out of work. Get in contact with your insurance adviser to find out whether your insurance company offers redundancy relief packages for clients or something similar. 

Your local broker can simplify this process and discuss your options with you.