Your mortgage is probably the largest financial commitment you’ve ever made. It’s almost certainly the biggest payment you have to make each month. Agreeing a repayment level that you can afford makes it a little easier to pay for the other essentials each month and removes the stress of worrying about the family home.
Things change, it’s time to look at the options available to you
When you took out your mortgage, both your personal and financial circumstances were probably very different. If the intervening years have been good to you, and there is a little extra money available each month, even a small increase in your repayments could save you thousands in interest charges over the remaining life of the mortgage.
If you’re struggling to make ends meet, reviewing your mortgage is even more critical. The good news is that your rights are now protected by legislation:– the Code of Conduct for Mortgage Arrears (known as “the Code” or “the CCMA”).
The Code guarantees you time and space to work things out. It is designed to make sure that banks deal with individual cases sympathetically. It encourages lenders and borrowers to work together to protect the family home at a repayment level that is affordable. You can read more about the CCMA here.
What options might be available?
- Extend the mortgage term (which means reduced monthly repayments)
- Move to interest-only payments on a temporary basis
- Reduce the repayment on a temporary basis
- Postpone mortgage repayments for a fixed period of time.
- Partially defer interest charges for a defined time period
Some of these solutions are temporary measures designed to get you back on your feet. Others involve a more fundamental restructure of your finances.
Complex choices, get the right independent advice
If you are looking to review your mortgage, we strongly encourage you to seek independent advice. Everyone’s circumstances are different. That’s why it’s important that your case is worked through on its individual merits.
Choosing the right option can sometimes be a difficult process. Some of the choices have far-reaching implications and involve difficult decisions – for example, you can lower your monthly repayments by repaying your mortgage over a longer term. This may be good news if you’re struggling to make repayments but it will cost you more in interest over the life of the mortgage.
Independent advice helps you work through the different options and make the right choices for you and your family. A good advisor will cut through the jargon and give you the confidence you need to make the right decision. They’ll also make it easier to deal with your bank and navigate the various forms required.
If you need help or advice, you can us on 1890 25 33 41 or send us an email:[email protected], or contact your existing independent financial advisor. Make sure that your advisor is qualified to advise on mortgages and is experienced in dealing with banks and the Code of Conduct for Mortgage Arrears.