Now this is the big one! If this is a pre-emptive search and you are still currently working and are just afraid of what might happen in the future, you may consider looking into ASU insurance (Accident, Sickness and UNEMPLOYMENT).
If you have not taken out an ASU plan and have unfortunately become unemployed, you may now be worried about how you will pay your monthly mortgage repayments. This article hopes to go over a few of the basics and give you resources in which to find further information, hopefully this will help to alleviate any unrest that you might be having.
Okay, first, the scary bit! You must do everything within your power to not gain further debt. If the lender/bank believes that you are not trying to tackle the situation and they see you enquiring more debts they may take you to court in a bid to reclaim the property so as to cover their potential losses. If you are already deep in mortgage debts and your lender has stopped being friendly and started with threats of court action and legal procedure then you MUST speak to an appropriately qualified debt adviser, the best way to do this is to speak to citizens advice bureau. Find your closest office HERE.
Now if you are claiming benefits to help cover costs whilst you’re unemployed then you are entitled to help with your mortgage from any of the following benefits:
- Pension credit
- Income based Job Seekers Allowance
- Income Support
- Income related Employment and Support Allowance
The support you will receive is called housing costs. The biggest problem with housing costs is that it only pays a standard rate of interest; this will not change no matter how high your mortgage interest rate may be. Solely as an example, say your interest rate was 4%, they may only cover 2% (Remember, this is just an example actual rates will vary). Another drawback is that it will not cover any capital repayments on your mortgage; it will only help towards the payment of the interest. It is advisory that you keep your lender in the loop the entire time. If you are seen to be making extra effort in the way of resolving the issue this may set to benefit you if any legal procedure should follow, the lender/court may take a more lenient approach in dealing with your situation if you have done everything in your power to resolve the issue. Citizens advice Bureau advise that you may even want to ask your lender if they would be willing to “accept the housing benefits for the time being until you can make up the full amount at a later date” which is something that is definitely at the very least worth a try.
Now unfortunately unless you are over the age of 60 you will have to wait approximately 13 weeks before your housing costs will be paid, if you are over 60 they can be paid immediately.
Here below are some resources for further information such as mortgage rescue schemes:
If you are interested about enquiring as to ASU INSURANCE products please click HERE for more information. We hope to have helped alleviate any confusion, stress or worry that you may have been encountering. If you would like to enquire about ASU insurance please feel free to call us or contact us via our website HERE.
Now, the legal bit - DISCLAIMER
The information provided is subject to change and although MortgagePro actively seeks to make the information provided on this page as accurate and as concise as possible MortgagePro makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of its content. We disclaim any liability for any actions incurred from this information, errors or omissions in the contents of this page and you should always seek further professional advice.