- Are your monthly credit card repayments higher than your monthly mortgage payment?
- Will you still be able to afford the minimum payments on your credit cards and loans in 3 months time?
- Do you need help to manage and clear credit card debt and unsecured loans?
- Are you paying credit cards and loans before you pay your mortgage each month?
Some consumers are finding that the payments they are making to credit card and loan commitments each month are getting, or have already gotten higher than the payments they are making to their mortgage or rent.
This is a very common problem but most people think they are the only people suffering with this problem until they seek professional debt consolidation help or advice.
The problem is common because the credit card payments and balances are compounding with interest and charges. It is a fact that if you are unable to earn two months money in one month, you may never get ahead. This is because the cards are designed to increase if you are not paying more than the minimum payments.
Most people think that by paying the minimum payment each month on a credit card that the balance will stay the same or reduce, this is not the case. You need to pay more than the minimum otherwise you are only servicing or renting the increasing debt. The aim is obviously to reduce and clear it.
The UK consumer is conditioned to living with some sort of unsecured debt or borrowings, be it a loan, credit card, store card, overdraft, catalogue, or some other form of unsecured credit but this is not the best way to be if you desire a future without financial problems.
Here at Lewis Alexander Financial Management, we see mortgages as a “life debt”, this is because at some point in life, most UK residents over the last 50 years were educated to believe that owning their own home, is or was, the best way to end up in life financially. We are not here to argue that point and when we look at other large European countries such as Holland, home ownership is on the decline and renting is of preference to most of the population.
The real problem is that consumers are not prioritising the secured mortgage or 2nd charge secured loan payments on their home over the unsecured contractual credit commitments they may have.
If you are doing exactly this, making sure your credit cards are paid so you can keep using them, then you need financial advice, immediately.
We cannot stress how soon the financial advice should be sort as your home is at risk if you do to keep up repayments on loans or other forms of debt secured on it.
Which would you prefer to lose if you had to make the choice, your credit rating or your home?
- If you fail to pay your mortgage you can lose your home!
- If you fail to pay your credit cards, only your credit will be affected in the short term!
We are not saying that you should ignore your credit card or loan companies you may be borrowing from! You must simply prioritise your secured loans such as a mortgage, over these other unsecured debts. Then you can come to an arrangement with your unsecured lenders to repay at a rate you can afford without sending yourself further down the line of possible mortgage arrears.
It is not often that we hear that a client has been told to prioritise their mortgage payment over the credit card payment by the credit card companies they owe money to. We cannot change the way they work but we can off the correct personal financial advice to a consumer.
- When we explain how the priority works for secured credit over unsecured credit, consumers are often pleasantly surprised. It is a principle of law that secured or priority debts do take priority over any unsecured financial commitments a consumer may have.
The most common situation at the moment for homeowners in the UK is that they are struggling to manage their credit card and loan repayments and because of this, balances are compounding against them and growing at an uncontrollable rate. The consumer then starts to miss mortgage payments, be them interest only or repayment as they wish to try and keep the credit card and loan companies happy.
You must accept that if you find yourself struggling with the above problems you need to take the financial advice mentioned above sooner rather than later.
There are a number of personal debt solutions that can help you to control, manage and subsequently clear the debt you may have which should leave you without mortgage arrears and give you some sort of end to the financial difficulties you may be facing.
Find out about Debt Management Online
Find out about an IVA or Individual Voluntary Arrangement in England
Find out about Bankruptcy in England
Find out about Debt Solutions in Scotland
Find out about Debt Consolidation Loans
Find general Debt Help and advice
If left, the personal debt problem will only get further out of control, unless that is, you are lucky enough to win the lottery or get paid for several months work in return for a normal months effort, which, is unfortunately, unlikely to happen!
- Do not leave it any long to seek professional advice if you have mortgage arrears or other secured loan problems.
- The longer you leave it to take advice, the less able anyone will be to help you.
Sometimes, we have to tell people that have left it too late that the only help they could get is from the mortgage company who is actually pressuring them. If you do not fall behind with the mortgage, you will not have to make that call, so do not make the mistake of prioritising unsecured credit card and loan repayments over your monthly mortgage payment or repayment.
- The advice we are offering above relates to interest only and repayment mortgage arrears.
We are not offering mortgage advice in this blog post but advice on dealing with mortgage arrears that are affected and created by other unsecured credit agreements which we would usually be able to help you clear and control.
If you find yourself struggling with the above personal debt problem and feel you would benefit from professional debt consolidation help or advice from a trained debt consultant, please contact our personal debt helpline today in absolute confidence.
Call 0800 018 6868 free today
Lines are open 24 hours / 7 days
Calls are usually free from a UK land line
Calls from mobile may be less expensive if you call 0161 872 3383
