Any homeowner in Newcastle wouldn’t dream that they’ll miss a mortgage payment, but something like an illness or family emergency can occur, causing a financial struggle, especially for those with low-income and minimal savings.
It can be more challenging for those who don’t have any insurance policies in place that could cover their mortgage payments should any unforeseen circumstances occur.
Here, we felt it was best to answer the following questions: what should you do if you are in this situation and think you will miss a mortgage payment, and how can you improve your credit score afterwards?
If you think or know you’re going to miss an upcoming payment on your mortgage, you must inform your lender immediately. Once you have missed a payment, this will instantly show on your credit record, which will heavily impact your ability to remortgage when your old mortgage is coming to its end.
Depending on your lender’s criteria and circumstances, there may be an alternative that can help you avoid missing a payment. Your lender will offer their support and guidance to borrowers going through a difficult time.
There is nothing wrong with feeling embarrassed. Chances are you are not alone – other people will be in a similar or worse situation. You won’t be the last or the first to contact their lender about being in this position.
If you miss one payment on your mortgage then this isn’t the end of the world, although this may have a negative impact on your credit rating, depending on how quickly this is resolved and how well you communicate with your lender.
Generally, if you fail to pay your mortgage, your lender will inform the credit referencing agencies, and this will have a negative impact on your credit score. However, as mentioned above, lenders will usually have a grace period after the payment due date. This will vary from lender to lender.
Your lender will usually try to work with you and help. In some instances they will set up a payment plan, a short term solution that can get you back on track with your payments.
Falling behind on multiple mortgage payments can lead to defaulting on the loan agreement, meaning that your lender could take repossession action. Repossession and eviction is the last resort for any lender, they will usually negotiate with you and help make a repayment agreement. It is recommended to reach out to a Mortgage Advisor in Newcastle prior to taking any payment plans etc.
Our Specialist Mortgage Protection Advisors in Newcastle will give you the option and recommend taking out the relevant insurance to protect you and your family from financial burden during any unforeseen health issues.
Depending on which protection insurance you take out, these will help pay for your mortgage and bills in the event you are off work sick or critically ill.
If you need any additional support or guidance, please get in touch to speak to one of our Specialists Mortgage and Protection Advisors in Newcastle and find out which insurance will benefit you.