Nowadays, it’s not uncommon for people to come up against financial difficulties – but when they affect our ability to meet our mortgage payments, how worried should we be?
If you’re dealing with financial problems, and you’ve been forced to skip mortgage payments because you simply haven’t had enough money, you need to be aware of how serious a problem this might be.
Your mortgage is a binding agreement between you and your lender. If you fail to keep to your side of it, your creditors can take measures to try and get their money back… and that could mean repossession.
So, to put it simply, the consequences of failing to repay your mortgage debt as agreed can be serious – much more serious than the consequences attached to failing to repay your unsecured debts.
You’re not alone
As quoted recently in the Irish Independent, Respond! Housing Association said almost 100,000 homeowners are struggling with their mortgage payments, with more than 40,000 in arrears of 90 days or more.
Aoife Walsh, spokesperson for the charity, said that the “real concern”, however, is the 28,000 homeowners who haven’t been able to afford their mortgage for over six months (180 days).
So, if you’ve not been able to keep up with your mortgage payments, it’s important to bear in mind that you’re not alone… other people are experiencing problems in these difficult economic times too – and there is help available.
What to do if you’re struggling
As an Irish resident, you may be eligible to receive what’s known as Mortgage Interest Supplement (MIS). As Citizens Information says on its website, MIS provides you with short-term support to help you afford your mortgage interest payments: ‘Your interest is assessed as your gross monthly interest less mortgage interest relief and any mortgage allowance or mortgage subsidy payable towards the interest part of your mortgage by the local authority’.
It’s important to understand that you’ll only receive help with the interest part of your mortgage, not the part that pays off the actual loan and house insurance. You will need to talk to your mortgage provider about the loan itself.
If you’ve got a consolidated loan, only the interest part of your loan that relates to the essential purchase, repair or maintenance of your property will be considered.
Of course, there are certain eligibility criteria you will have to meet before you’re able to receive Mortgage Interest Supplement, and you can read more about these on the Citizens Information website.
What other help is available?
Depending on the reasons behind your financial difficulties, there may be some other help available.
Have a think about why you’re struggling with your mortgage payments. Is it because you’re paying too much towards your unsecured debts every month? If so, you might find that a debt management plan could help. A debt management plan is an agreement between you and your unsecured creditors in which you’ll repay your debt over a longer period of time (which means you’ll pay less each month).
The payments you make on a debt management plan would be calculated based on the money left over after your mortgage and other essential expenses have been paid – so this could really help you make sure you don’t miss any mortgage payments. It could also help you pay off your mortgage arrears at a realistic rate.
For more guidance on debt management plans and to find out if one may be right for you, you could seek professional debt advice. If you’re one of the many thousand struggling homeowners in Ireland, you should seek advice and tackle your problem before it gets worse.