HELPING HAND
I thought I’d end up homeless after my mortgage bill jumped by £500 a month – but there was a solution
Keep scrolling to find out more ways to help with your mortgage payments
A WOMAN who feared she would become homeless because of rising interest rates has shared a solution which saw her bills more than halved.
Katy Lowry-Phillips, from Hawarden, Flintshire, feared she would lose her home because of increased interest rates as her fixed-rate mortgage deal came to an end.
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The working mother of three said coming off her deal could have pushed up her monthly payments from £750 to £1,200.
She said the prospect of having to sell up was "really frightening" as the family home had been specially adapted for two of her children's complex needs.
“I’m working as many hours as I can, but the bills were racking up and I’d built up a bit of debt from the years of being on my own,” she
Many households have been crippled by rising mortgages on top of other financial pressures.
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However, Katy managed to find a solution which has seen her mortgage costs more than halved over the next five years.
The NHS worker qualified for the Help to Stay scheme, a support program run by the Welsh government for those having financial difficulty paying their existing mortgage.
The Help to Stay Wales scheme offers support to homeowners in the form of a shared equity loan.
A shared equity loan is where a lender agrees to give you a loan alongside your existing mortgage lender in return for a share of any profits when you sell your house or repay the loan.
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In some cases, this can help reduce existing monthly mortgage payments to an affordable level and allow you to continue to own and live in your home.
It will also give you time to resolve your financial issues, reducing the risk of repossession.
The Sun's James Flanders explains how to find the best deal on your mortgage
The scheme was a lifeline for Katy and she told the news outlet she is "not dreading each bill coming through the post".
“Things are much better now,” she said.
It comes as the Bank of England cut interest rates for the first time since 2020 yesterday.
The move will hopefully see the cost of some mortgage deals come down, but they are still likely to remain higher than what we have seen in previous years.
Are you eligible for Help to Stay?
To qualify for this scheme you must first own a house in Wales.
You also must speak to your existing mortgage lender to see if they can help you before you apply to the Help to Stay – Wales scheme.
What to do if you are in debt?
IF you find yourself in debt the government has a number of support measures.
If you live in England or Wales, you can apply for Breathing Space (also called the Debt Respite Scheme).
This is a temporary protection period, to give you time to get debt advice and set up a solution. It means that for up to 60 days:
- your creditors (the people you owe money to) will have to stop trying to collect your debt
- your creditors will have to freeze most interest, fees and charges on your debt
- your energy supplier cannot install a prepayment meter without your permission, and cannot collect any debt using your prepayment meter
If you live in Scotland, you can apply for a debt moratorium.
During this temporary protection period, your creditors will not be able to take any action to recover what you owe them.
The scheme may be able to help you if all of the eligibility criteria is met.
To be eligible, you must:
- Be having difficulty, or facing difficulty paying your mortgage.
- Be at risk of losing your home.
- Only have your existing mortgage secured against your property.
- Have a total household income of less than £67,000 per year.
In addition, the property must be:
- In Wales.
- Valued at less than £300,000.
- The only property that you own.
You will not be eligible for the scheme if you have more than one loan secured against your home, for example, a second charge or a charging order.
How do I apply?
To apply, you must complete and submit the Help to Stay application form.
This can be found on the official Welsh government website.
Information about how to complete the application form can be found in the form itself.
You must then email the application form to the email provided or you can post your application.
What to do if struggling to meet mortgage repayments?
If you do not qualify for this scheme, the government also runs a similar fund called the Support for Mortgage Interest (SMI).
It offers help with mortgage interest payments to those on Universal Credit and other benefits.
But if you're on Universal Credit, SMI can help you pay the interest on up to £200,000 of your mortgage.
For those on pension credit, it's up to £100,000.
To be eligible for a Support for Mortgage Interest (SMI) loan, you need to be getting one of the following qualifying benefits:
- Income support
- income-based jobseeker's allowance (JSA)
- Income-related employment and support allowance (ESA)
- Universal Credit
- Pension credit
You can start getting the loan:
- From the date you start getting Pension Credit
- After you've claimed Income Support, income-based JSA or income-based ESA for 39 weeks in a row
- After you've got Universal Credit for 3 months in a row or you moved to Universal Credit within a month of another benefit ending and you’ve spent 3 months in total getting these benefits
Housing Loss Prevention Advice Service (HLPAS)
The government also offers anyone at risk of losing their home to get free legal advice and representation in court.
This is regardless of their financial circumstances.
You can find more information on this by visiting the UK's official government website.
There are plenty of other ways to get help if you are struggling to meet your payments.
Contact your lenders
It is also best to contact your lender as soon as possible if you are struggling.
This can be as simple as picking up the phone to your bank or building society, or visiting your local branch.
It's best to do this before you know you won't be able to meet your monthly repayments, and not after
That's because going into mortgage arrears is very serious.
If you can't pay back the debt that you borrowed to buy your house, then ultimately the lender who lent you that money has the right to repossess your property in order to recoup its cash.
Mortgage holiday
Another alternative is a mortgage holiday.
These types of schemes allow you to take a short break from having to pay towards your mortgage.
If you’re looking to arrange a payment holiday through your lender, you must speak with them first.
They’ll be able to give you information about their policy and the criteria you must meet.
The length of your payment holiday will depend on the lender.
A typical short break can range between one to three months but can also extend to 12 months.
To qualify, you’ll often need to prove that you’ve made payments on time for a minimum period set by your lender.
Your ability to take a mortgage holiday will depend on the size of your mortgage and the current value of your home.
Some lenders will only allow a mortgage holiday if the LTV (loan-to-value) of your remaining mortgage is lower than 80%.
It's important to know that payment breaks are usually recorded on your credit files.
This could impact future applications for borrowing, and have an impact on how much interest you pay, how much you can borrow and your chances to remortgage.
Access free and confidential debt advice
There are several charities and services that offer free help and advice if you're worried about money.
It's always best to contact one of these services before thinking about debt consolidation or using a debt adviser who will likely charge you.
Citizens Advice is a free and impartial service which will help you come up with a plan to get on top of your debt including which payments to prioritise and how to reduce your living costs.
The organisation's website has a on many aspects of debt, but you can contact them directly by phone, online or in person for more personalised help.
StepChange is another free advice service offering support and guidance online or over the phone, and it's completely confidential.
You'll need to provide details of your debts, income and household spending to get a clear picture of where your money goes.
Where possible, their advisers will help you come up with a plan to repay all your debts but in a way that you can afford.
National Debtline is a charity run offering free and confidential advice to people in England, Wales and Scotland.
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You can or over the phone on 0808 808 4000, between 9am and 8pm Monday to Friday, and 9.30am to 1pm on Saturdays.
An adviser will help you work out what you can afford to repay, and help you decide on the best solution for your debt.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
Plus, you can join our Facebook group to share your tips and stories
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