Are you concerned about missed repayments on your Cardiff home? You may be feeling stressed and frustrated, especially amid the increased mortgage rates the UK is currently seeing.
If you find yourself in this situation, there’s no need to worry. You’re certainly not alone and there are ways in which you can solve your repayment issues and get back on track with your mortgage – plus there are always selling opportunities on your property too.
In this article, we’ll talk you through everything you need to know when it comes to what you can do if you miss mortgage payments, from what happens when you miss a payment, late fees you may incur, what to do if you miss a payment, and what you should consider if you’re taking out a mortgage on a Cardiff property.
Mortgage rates rising again
With inflation rising in recent months, it’s no surprise that mortgage rates have increased in response. Raised inflation results in the banks having to borrow more money which tends to have a knock-on effect on mortgage rates.
Many banks and lenders are currently advertising rates as high as 5.5%, so an increased number of people are missing mortgage payments since these rates have increased.
What happens if you miss a mortgage repayment?
When you miss a mortgage payment, the first thing that may happen is that you’ll receive a notification from your lender that you’re in arrears with your mortgage. Not all lenders will contact you if only one mortgage payment has been missed, but some will contact you automatically when the payment is not received.
If you can make the payment so that you’re no longer in arrears, we strongly recommend you do so. If you’re not in a position to do this, contact your lender and explain the situation to them. They’re much more likely to be lenient with late payments if you’re upfront and communicative.
Depending on your lender, you may incur late fees if you fail to make your mortgage payments on time.
You may be required to pay a percentage of the missed payment as a late fee, or this could be set to a specific cost.
Regular missed/late mortgage payments can lead to property repossession. If you’re facing repossession of your Cardiff home, here’s everything you need to know.
What to do if you miss a mortgage repayment & the worst-case scenario, face repossession?
So what should you do if you’ve missed a mortgage repayment or are facing repossession?
Contact your lender
The first step you should always take if you’ve missed a mortgage payment or you think you’re likely to miss one is to contact your lender. Communication is key when it comes to keeping lenders happy, and they’ll be more understanding if you keep them updated on your financial situation.
They may even help you set up a repayment plan to better manage your mortgage payments.
Take in a lodger
Extra funds may be needed in order to meet your regular mortgage payments, which is why more and more people are welcoming a lodger into their homes.
If you have a spare room, a lodger can bring considerably more money into your finances each month to help you keep up with your mortgage payments, and may even help you to save some extra money too.
Rent out your home
If more funds are required to help pay off your mortgage, you may want to consider renting out your property, particularly if you have a second home or somewhere else you can stay.
The money you could receive in rent for your home will likely cover the cost of your mortgage and some, allowing you to meet your mortgage payments and save a little too.
Consider selling your home to a cash house buyer like We Buy Any Home
You could also consider selling your property, and a quick way to do this is to sell your home to a cash house buyer such as We Buy Any Home.
It may be that your property has increased in value since you bought it, allowing you the ability to pay off your mortgage if you were to sell and have a tidy sum of money in profit too. Get a free cash offer for your Cardiff home today to see how We Buy Any Home could help you.
Are mortgage interest rates going to go up again?/Will mortgage rates continue to rise?
It is likely that mortgage rates are continuing to increase, with rates of over 5% as of April 2023.
It’s likely that mortgage rates may reach as high as 6% before they come down to more typical levels seen in recent years.
When will mortgage rates go down?
It’s unlikely that mortgage rates will decrease any time soon, particularly due to rising inflation levels and the impact of the cost of living crisis and COVID-19 pandemic.
However, we may begin to see mortgage rates decrease in the early part of 2024, providing that inflation rates lower and lenders can offer better rates to prospective buyers.
What to consider if you’re getting a mortgage in Cardiff
If you’re considering taking out a mortgage for a Cardiff property, here are a few key points that you may wish to consider.
Should you fix your mortgage for 5 years?
Fixed mortgages are highly popular, particularly when interest rates are low as they help to secure payments for a set amount of time – usually two, five, or ten years.
However, with mortgage rates having risen to over 5% over the last year, you may wish to fix your mortgage for a shorter time than five years, or choose a variable rate instead in the hope that mortgage rates will decrease over the next year.
Raising a Deposit
Another key aspect to bear in mind when applying for a mortgage in Cardiff is raising money for a deposit.
These days, most lenders will require a minimum of a 20% – 25% deposit before granting you a mortgage. With the average cost of a Cardiff property £287,361, this could be as much as £71,840. It is therefore advisable to begin saving money prior to applying for a mortgage to increase your chances of being successful.
Along with a deposit, there are other costs to bear in mind when applying for a mortgage on a Cardiff property.
Here are some fees to bear in mind prior to applying for a mortgage:
- Solicitors fees – You will likely need a solicitor to work on your behalf to ensure the legal work of purchasing a home is carried out correctly. This may cost you in the region of £1,000 depending on the extent of the work you need to carry out.
- Mortgage fees – Some lenders will charge an arrangement fee when you take out a mortgage, particularly if the rate is lower than other mortgage deals. This fee is typically £995 and is payable prior to the mortgage being granted.
- Survey fees – You need to have a survey carried out on the property you’re buying to ensure that there is nothing significant wrong with the building that would affect the valuation. This is typically an essential step when borrowing money from a mortgage lender and could cost you in the region of £150 – £1,500 depending on the level of the survey.
- Stamp duty – Lastly, stamp duty is a significant cost you’ll need to bear in mind if you’re not a first-time buyer. The cost of stamp duty will vary depending on the value of the property you’re buying, however, it tends to be within 5% – 12% of the purchase price.
If In Doubt, Contact We How We Buy Any Home
As mentioned earlier, one option you could take if you’ve missed mortgage payments on your Cardiff home is to sell your property to a reputable cash-buyer – that’s where We Buy Any Home comes in.
Unlike other companies in this sector, we specialise in providing you with a quick property sale where you won’t have to compromise heavily on the sale price of your home. This is a great route to take if you’ve missed mortgage payments or even if you’re facing repossession, as we can purchase your property more quickly than traditional selling routes. You could receive your funds in as little as seven days!
We’ll cover your solicitor costs, as well as the price of a property surveyor when carrying out a thorough valuation. All you need to do is to request a free cash valuation via our website, and we’ll do everything else.
Get your free, no-obligation cash offer today and see how we can help you sell your Cardiff house fast.