Six things you must do NOW if you’re struggling to pay your mortgage and extra help that could be hidden in small print
IF you're struggling to make your monthly mortgage payments, there are steps that you can take to help you get your head above water.
The Bank of England held interest rates at 5.25% earlier this month for the second time in a row.
Many lenders have started to reduce their rates as a result, easing the squeeze for millions of homeowners.
Some experts are even predicting that rates could drop below 4% by the end of this year.
While this may bring a sigh of relief for many, interest rates are still at their highest level since March 2008.
The number of mortgage arrears has jumped as cost of living pressures and higher rates on home loans bite.
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Across the UK, 87,930 homeowner mortgages were in arrears in the third quarter of this year, 7% more than the previous quarter.
UK Finance, than banking industry body, said mortgage arrears are still running at less than half the levels seen in 2009.
Dozens of mortgage lenders representing more than 90% of the market have signed up to the Government’s mortgage charter.
This means they have promised additional support for borrowers.
It includes giving customers approaching the end of a fixed-rate mortgage the chance to lock in a deal and request a better like-for-like deal if rates change up to six months ahead.
Plus they've guarantees no repossession within 12 months of a first missed payment.
But if you're still struggling to pay, Nicholas Mendes, technical manager at broker firm John Charcol, explains what you should do.
Contact your lender
It's best to contact your lender as soon as possible if you are struggling.
This can be as simple as picking up the phone to your bank or building society, or visiting your local branch.
It's best to do this before you know you won't be able to meet your monthly repayments, and not after
That's because going into mortgage arrears is very serious.
If you can't pay back the debt that you borrowed to buy your house, then ultimately the lender who lent you that money has the right to repossess your property in order to recoup its cash.
An adviser will ask you about your income and spending, so try and have as much information to hand as possible when you call.
Self-employed workers can also get help through .
Know your rights
It also helps to have a rough idea of the help that might be on offer to you.
As part of the mortgage charter, lenders can now change the term of your mortgage deal temporarily to bring your monthly payments down for up to six months.
You can also switch to interest-only repayments for six months, which can also reduce your monthly bill.
You won't have to share any more financial information about your current circumstances for lenders to agree to the change.
It also won't affect your credit score.
But it's worth bearing in mind that although this could help in the short term by lowering monthly repayments, it could mean you pay back more in the long term.
If anyone using the temporary measures decides to go back to their original plan within six months they are free to do so.
A number of other measures also came into affect earlier this year.
Customers approaching the end of a fixed-rate deal have the chance to lock in a deal up to six months ahead.
Some banks previously offered this before the change, and others for a shorter time.
Now borrowers can be sure that their bank will offer this time-frame automatically.
Homeowners can request a better deal with their lender right up until their new term starts, if one is available, though, meaning they won't miss out if rates later go down.
Any homeowner can also approach their lender for advice on repayments without impacting their credit score.
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To take advantage of any of these changes, homeowners should speak to their lender.
You'll need to be up to date with your repayments to be eligible, as the help does not apply to those who have already fallen behind on payments.