Personal finance column – On The Money
Posted by admin in Free columns
On The Money gets personal with finance, providing authoritative, expert advice on a host of financial topics that affect your readers.
Some of the topics which will be covered in the coming weeks include:
- What to do if you fall behind with your mortgage
- The first steps to addressing debt
- The support agencies that can help you with your money problems
- Budgeting made simple
- Spotting the signs of debt stress
- Getting a good return on your lump sum
Give your readers even more from their weekly paper with this ideal addition to your lifestyle or business sections.
To use the column free of charge, just display the logo and tagline of our sponsor, Ulster Bank.
Sample column >> Filed every Friday morning
What to do when you can’t pay the mortgage
Anyone can get into difficulty managing their debt. Even small changes in circumstances can put huge pressures on your finances and can quickly result in missed loan repayments and mortgage arrears.
When you find yourself falling behind in a loan or mortgage, it’s important to talk to your lender as soon as possible. Never simply ignore missed repayments or correspondence from your bank – the problem won’t go away and you simply intensify your stress levels.
Being in financial difficulty can leave you in a constant state of worry and it’s easy to panic and ignore your situation. But the longer you’re struggling the more debt mounts, so it’s better to act fast.
Obviously, a thorough review of your budgets and outgoings is the first step to getting out of arrears difficulties.
Assuming you have completed this process, you need to do two things; engage with your bank to renegotiate the terms of your loan and find out if you are entitled to any income supplements.
Arrange to meet your bank and let your account manager know where you stand. Show them your budgets and explain that your current repayment schedule is simply not workable.
You can get free independent money advice from agencies such as the Money
Advice & Budgeting Service (MABS) or www.itsyourmoney.ie. Be sure to speak to an advisor before making any drastic moves – especially if you’re thinking of borrowing money from other sources to pay off existing debts.
There are a number of solutions possible to get you out of an arrears predicament.
Term adjustment – Depending on your age and other circumstances, your bank may agree to extend the term of your loan. This will reduce your monthly payments although it will mean you eventually pay more interest over the life of your mortgage. Remember, however, you may be able to reduce the term later when your finances stabilise.
Interest only – Many mortgage holders in arrears difficulties are switching to interest-only loans. This is a loan where you only pay the interest, not the capital, reducing your monthly outgoings. At the end of the term, however, you will still owe the full amount so this option should only be considered if it’s really necessary. Even then, it should only be a temporary solution.
Reduced payment – Depending on your circumstance, your bank may be willing to accept reduced monthly repayments temporarily until you are in a better financial position. This solution is usually put in place for a six-month period but you should note that making reduced repayments will increase the amount of interest due until this shortfall is fully repaid.
Where else can you turn when you’re in mortgage difficulty? A good start is to find out your social welfare entitlements. For example, if your wages have been reduced you may be eligible for Mortgage Interest Supplement.
You’ll have to meet a number of conditions to qualify. You’ll need to prove you could afford the repayments when you began your mortgage, you must be habitually resident in this State and your house may not be up for sale.
The payment is means-tested and net income from your employment, social welfare payments and most HSE payments will be taken into account.
To find out if you’re eligible for this supplement, contact your local Community
Welfare Officer at your Local Health Centre or visit www.welfare.ie. And remember
– if your application is unsuccessful for whatever reason, you’re entitled to appeal it.
