Support for homeowners after redundancy From Shelter http://england.shelter.org.uk/home
You may be worried about getting into arrears with your mortgage or other loans secured on your home if you are made redundant. However, help may be available with the costs of your mortgage.
Help may be available from the government with mortgage costs after redundancy
Speak to your lender if you’re falling behind with your mortgage payments
Get advice before deciding to sell your home
Apply for government mortgage support
You may be eligible for government support to keep your home if you lose your job, through support for mortgage interest.
If you claim certain welfare benefits, you may be entitled to help towards the interest payments on your mortgage for up to two years.
You will only be entitled to claim for the interest on your mortgage, and the amount paid may not cover the full cost. You won’t receive any help with any capital you have to repay.
Claim benefits available to help keep a home
You may be eligible for benefits to help you keep your home. It is important to claim everything that you are entitled to.
If you are made redundant, you may be able to claim benefits such as jobseeker’s allowance and/or income support. You need to claim these benefits to be able to claim support for mortgage interest to help you to keep your home.
You won’t be able to claim housing benefit if you are a homeowner, unless you are in a shared ownership scheme, in which case you can claim housing benefit on any rent you pay.
You may not be eligible for benefits immediately if you have received a redundancy payment or payment in lieu of notice.
If you have mortgage payment protection insurance it is probably a condition of your policy that you are receiving benefits to claim the insurance.
Find out more from Gov.uk about benefits you can claim to help keep your home.
Speak to your lender
Contact your lender as soon as you start to fall behind with your mortgage payments or if this might happen soon. There are a number of things you can do to reduce your monthly payments, and you can negotiate with your lender about these.
Your lender may allow you to:
- Take a payment holiday – this is where you pay less, or nothing at all for a short period and catch up later
- Consolidate the arrears – add the arrears to your mortgage, this will increase the debt, and probably the monthly payments
- Extend the term of your mortgage – repaying the mortgage over a longer period should reduce the monthly payments
- Switch to an interest only-mortgage – this should also reduce your monthly payments, but will not repay the capital, ie the amount you borrowed
Make sure that you can stick to any agreement you come to with your lender as they are less likely to agree to further changes if you get into arrears again.
Check insurance policies
After redundancy, you may be entitled to financial support if you have mortgage payment protection insurance. This is usually be for a limited time only. Check your policy details.
Payments from this policy could give you extra time to find another job, sell or rent out your home or come to an arrangement with your lender.
Rent out your home
You could rent out a room in your home, if you have space and your circumstances allow it.
You can earn a certain amount from rent without paying tax on it. The money raised may help you with your mortgage costs.
Check with your lender, and ask permission to rent out a room, or you could be breaking the terms of your mortgage agreement.
If you have somewhere else to live, renting out your home could also be an option. You could move somewhere cheaper, and have extra money to help with mortgage costs.
There will be restrictions on renting out your property if you own your home through a shared ownership scheme. Check with the housing association that part-owns your home.
Speak to an advisor if you need further help. Use Shelter’s directory to find a face-to-face advice centre in your area.
Use Shelter’s budget calculator to help you work out your spending and manage your money.
Sell your home
Deciding to sell your home voluntarily could be an option if you cannot afford to keep up with your mortgage payments and things are unlikely to improve in the future.
If you are in negative equity, you still owe money to your mortgage lender after you sell.
Get independent advice before making a decision to sell, especially if you think you may be homeless afterwards. A council won’t help you with settled housing if you make yourself intentionally homeless.Red