REDUNDANCY – TAKE ACTION NOW
Gone are the days of a job for life and most people will experience redundancy at some point.
This is a time of worry and reflection when you think about what the future hold but you also have the worry of how to pay your bills whilst you try and find new employment. This is the major worry for most people after redundancy but the largest bills are the biggest worry and for most people the largest bill is their mortgage payment.
Does this sound like your situation, lying awake at night worrying about how to pay your bills? If you have been made redundant you need to take action quickly to stop you getting into debt or behind with your mortgage payment which can quickly lead to mortgage arrears if left unmanaged.
If you get into mortgage arrears and your lender believes you are ignoring the problem they will take you to court which could lead to you losing your home
If you are redundant and looking for a job you may get assistance in the form of benefits but these will only cover the mortgage interest at best and only if you have no savings. These payments are capped at a rate of 3.63% on up to £200,000 of your loan or mortgage no matter what your actual interest rate or amount owed.
This means that for many people you will have to top up these government payments but as you have just been made redundant what happens if you cannot afford to do so? You could ask your lender if they will accept just what the government pays you but they have no duty to accept this and will ask you to make up the shortfall later if they do accept it
The benefit payment does not start until 13 weeks from when you have been made redundant and this is the danger time when you can start to get into mortgage arrears. So what can you do if you suffer an extended period of unemployment following your redundancy?
Most people will do one or more of the following which are all big mistakes:
Try and just give the house keys back to the lender
Act like an ostrich and do nothing burying your head in the sand.
Ignore your lender and watch them take you to court to get a repossession order for your home.
If you can see no way of paying your mortgage after your redundancy you would be much better selling the house for whatever you can get for a quick sale rather than giving the keys to the lender or doing nothing.
Why? Because you are still legally liable for your mortgage payments, buildings insurance and lender costs until your bank can sell your home. The bank will probably get a lot less for it than you could as they will accept whatever will pay what you owe on the mortgage. There are thousands of examples of this and even worse the bank can sell your home for less than you owe them and bill you for any shortfall!
For anyone redundancy is a worrying time but it is the time to take immediate action making a plan of action with someone who has helped many people already with just your issues.