Has a change of circumstances made mortgage repayments unaffordable?
| Overview
Buying a property is one of the biggest financial decisions anyone will make in their life. Failure to keep up payments can ruin your finances and even lead to you losing your home. No one takes on the cost and the responsibility of a mortgage expecting that they won’t be able to pay. Sometimes, however, circumstances change and a once manageable mortgage that was borrowed responsibly becomes unaffordable.
Many of the clients we see at Negative Equity NI are people who have borrowed responsibly, but through no fault of their own have found themselves in a situation where they simply can’t afford to meet their monthly repayments.
| Why do mortgages become unaffordable?
There are many reasons why homeowners can find themselves in this position. Some of our clients have found themselves dealing with health issues that have forced them to give up work or cut their hours significantly, leading to a loss in income.
Following the financial crisis and recession ten years ago many people were made redundant, meanwhile, for those in work but on low incomes, stagnant real wages over the last decade while the cost of living has increased has mounted increasing pressure on household budgets.
Some borrowers took out mortgages with long repayments terms, only to retire before they finished paying off the loan. With their income falling after leaving work, they might find their mortgage repayments are too much for them to pay, or they’re affecting their quality of life in retirement.
Some of our clients are young couples who could afford their mortgage costs when it was just them, but now they’ve started a family and the cost of taking care of their child has stretched their finances.
How is home equity calculated?
Home equity is calculated by subtracting the amount you still owe on your mortgage from the current market value of your home.
Can you have negative equity?
Yes. With standard loans, your home equity will increase over time. With negative-amortizing loans — a loan with monthly payments less than the interest rates — your equity decreases over time as your owed balance increases.
| How can we help?
There are a number of possible solutions we can offer to resolve your property debt problems, depending on your circumstances, but for many of our clients a sale and settlement is the only solution to their problem.
We have successfully negotiated hundreds of cases every year where we have arranged the sale of our clients’ homes and reached an affordable debt settlement with the lender.
Whatever your circumstances, the first step to dealing with your unaffordable property debt is to contact Negative Equity UK for an initial free, no obligation consultation with one of our advisor.
Take a look at our reviews and call us on 028 9018 3223 or go to our website and arrange for us to call you at a time that suits you.