The UK economy is weakening and with this comes extra pressure on many of us to make mortgage payments, with some having to resort to using high interest credit cards to pay the mortgage. The worst hit areas of the UK are Wales and the Midlands with up to 1 in 10 people resorting to paying for housing using credit cards.

Of course this practice is okay if you are paying off the balance each month. However if you are only making minimum payments this is where the problem can spiral out of control and you run the risk of losing your home. So how can you handle the situation if you are experiencing difficulties? I have written a few tips below which will hopefully take some stress out of the situation.

If you know you are going to have problems paying your mortgage contact your mortgage lender and discuss the problem. The sooner they know the more likely they will be able to help and you will also avoid larger debt problems in the future. I also suggest you look into switching to an interest only mortgage until your financial situation improves. If you are already on an interest only, see if you can reduce your payments with them temporarily. However, if you are unable to do this you can also re-mortgage which can help in the short term, but can have longer term risks.

You can also contact an organisation or charity to provide advice. The below websites have useful information and you can call them for support. These organisations can help you in various ways.
• They can identify if you are eligible to claim benefits
• They can also help you negotiate a manageable repayment plan with your lender
• They can put you in contact with organisations who may be able to represent you at Court to prevent an eviction if necessary
• Refer you to a specialised organisation who deal with debt problems, benefit problems or mortgage arrears
• Give advice on a range of other options relevant to your individual situation

You may find these links useful:

• www.citizensadvice.org.uk or the Consumer Credit Counselling Service (CCCS) at www.cccs.co.uk.
• Another suggestion is take a look at your expenditure and see if you can cut out non-essentials such as gym membership.
• You can use comparison sites to compare prices and switch utilities saving you money, check out this article it shows you how you can reduce your energy bills.
• Also look at your insurance policies you can use a site like Gocompare.com Home Insurance to compare you current policy and save money.
• Sometimes it could be beneficial to take a look at your current mortgage deal and shop around it could be possible to get a better deal and reduce your outgoings. You can use Padzo’s mortgage calculator to help you assess how much you can afford. The mortgage calculator enables you to see what your mortgage payments will be for different lenghts of time and interest rates.

Some additional tips:
A good way of making some money is by renting out a spare room to a lodger. The great thing about this is that the first £4,250 you earn is tax free.

Other ways of saving money to help pay for your mortgage include consolidating your debts, you can sometimes save yourself a lot of money. However, this can put your home at further risk as you do have to secure the loan against your property.

Another tip if you do have severe difficulties, do not hand the keys to your lender. Sell the house yourself at least you will have a place to stay while it is on the market. Also the lender will sometimes sell the house for less than the market value and you will have to pay the shortfall.

Related posts:

1. Having problems paying your mortgage?
2. How to save money during a recession
3. Home Sales Lowest Since 1978
4. Higher Lending Fees
5. Financing a Property Development