Many homeowners are worried about how the coronavirus crisis will impact their ability to pay their bills. Get advice if you are worried about paying your mortgage or rates.
Paying your mortgage
Keep paying your mortgage if you can afford to, especially if you have a repayment arrangement with your lender or have been to court about repossession.
Support from your lender
Talk to your lender if you are struggling to pay your mortgage because of coronavirus. Your lender should offer you support if you are struggling to pay your mortgage because of COVID-19.
The lender has to consider your circumstances when deciding what support to offer. This is called "tailored support". There are different options the lender can consider. Some of these are set out below.
Your lender may allow you to make reduced payments if you cannot afford your usual payment. They will only allow this for a short time while you get advice on your options. Our advisers can help you work out what else you can do to help manage your mortgage.
Extending the term of your mortgage
Your lender can agree to make the term of your mortgage longer. While you will pay less each month, you'll pay more overall as you are paying interest for a longer time. It is basically a remortgage.
Changing your mortgage type
Your lender may agree to change your mortgage type if this helps you to manage your repayments. This could allow you to change to a lower interest rate.
Your credit report
Lenders will tell credit reference agencies about any tailored support you get. Your lender should let you know if the support they offer will have an impact on your credit rating.
Asking your lender for extra "tailored" support
Check your mortgage lender's website for a section about supporting customers during COVID-19.
Contact the lender as soon as possible to let them know you need support. It's best to do this before you miss a payment. When you talk to your lender make sure you understand all the options. Ask how these options will impact on your future payments and your credit rating.
Can your mortgage lender take you to court?
Lenders should only take legal action against a mortgage holder as a last resort. This should only happen if all other attempts to resolve the payment problems failed. The lender might take you to court if
- you cannot agree a payment plan or
- you break the terms of a payment plan.
It's important to get advice if your lender is starting legal action against you. You could lose your home if you ignore this problem.
The courts adjourned all existing repossession cases last year. Lenders can now contact the judge who deals with these cases, (the Chancery Master), to ask:
- for permission to resume a case that had been adjourned, or
- for permission to begin a new legal case against a mortgage holder.
If your lender does this you should get notice at least 6 weeks before the Master considers your case. You should receive a letter saying your case is listed for an administrative review. Contact Housing Rights urgently if you get a letter from the court. We can explain what information you need to give the Master to help your case.
Enforcement and eviction
Your lender should only take you to court as a last resort. Lenders need to consider whether any person in the property is particularly vulnerable due to COVID-19.
- your lender wants to take you to court or
- they've already got a possession order against you and want to enforce this order.
Benefits to help with mortgage payments
If you are already claiming certain benefits, you may be able to get Support for Mortgage Interest. This is a payment that government makes to help you with the interest charge on your mortgage. It isn’t a benefit. Instead, it is a loan and you will have to pay it back when you sell your home.
If you have just started claiming Universal Credit, you need to wait 9 months before you can get this help with your mortgage.
The government hasn’t announced any changes to benefits that will give extra help to pay mortgages.
Benefits to help with rates
You can only get help to pay your rates if you are already getting or can claim Universal Credit or Housing Benefit.
You can apply for a rates rebate if you are getting Universal Credit. Your payment can be backdated for three months or until you became entitled to Universal Credit if you've been getting the benefit for less than three months.
You can only make a new claim for Housing Benefit to pay rates if you are state pension age or older.