Your Money POUND NOTES
Talking to your lender about issues is always a good idea
If you are on a discounted, tracker or standard variable rate mortgage your mortgage payment could change at any time the Bank of England base rate changes.
This can lead to significant monthly payment increases, so it’s important to plan for future base rate increases.
Here, Terry Fisher property expert at We Buy Any Home (uk.webuyanyhome.com) reveals how to handle increased mortgage payments.
Communicate with your lender
“Keeping an open line of communication with your lender sets a level of understanding, failing to do so can lead to falling into more complicated situations and the risk of repossession,” says Terry.
Assess your budget
“Review your current financial situation to understand how much you can afford to pay each month. Evaluate your income, expenses, and any potential areas where you can cut back.”
Refinance or renegotiate
“If you have a good credit score and interest rates have decreased since you took out your mortgage, consider refinancing to lock in a lower rate. Alternatively, contact your lender to discuss renegotiating.”
Create a new budget
Says Terry:
“Cut down on discretionary spending. Prioritise essential expenses and allocate more funds toward your mortgage.”
Prioritise savings
Having an emergency fund can help you navigate unforeseen circumstances and prevent further financial strain.
Council tax reduction
“Council tax reduction is a policy aimed at providing financial relief to eligible individuals or households,” says Terry. “Certain criteria must be met to be able to get advantage of this service.”
Seek financial counselling
If you’re struggling to manage your increased payments, consider seeking advice from a financial counsellor or advisor.