Should Have Had MPPI!

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Repossession is a nasty word. For most people their home was expected to be their biggest asset – the most expensive item they’d ever buy. It was searched for eagerly; they waited in trepidation whilst valuers worked out their sums and celebrated when the mortgage was approved. They stamped their own marque on the home and garden. With first time buyers it was often the home they brought their first child home to – to a bright cheerful nursery, decorated with so much excitement.

What went wrong?

If you’re made redundant, then the only product which will actually mean that your mortgage payments will be honoured is MPPI – or Mortgage Payment Protection Insurance. Only a quarter of people have this cover in place. There is some talk of making this a compulsory requirement when taking out a mortgage – even of it being an inclusive item paid for by the mortgage company, at no extra cost to the home buyer.

MPPI could help you to get over the shock of redundancy by paying the interest on your mortgage for a year – two in some cases, depending on the rules, regulations and small print on your policy. There will be a waiting time of a month (possibly two) before the insurance kicks in.
Avoidance of the dreaded repossession situation is something to think about – even if you’re in the fortunate situation where you think it can’t happen to you. So many people make the statement “My job’s ok – we’re busier than we’ve ever been” only to find a few short months later that the boss is telling them a very different tale.

You’ll find that the majority of mortgages have some flexibility and if you can make extra mortgage payments in advance you may be able to reduce your mortgage or even take a payment holiday if things get more difficult financially.

In this way, hopefully you’re in a better position to ride out the storm.

If you do in fact lose your job and have no back up, such as topped up mortgage payments or mortgage protection cover, then make sure that you receive any help which you’re entitled to. Even if the fact that you’ve received a redundancy payment means you’re not eligible for Jobseekers Allowance, you should register without delay as this is necessary if you are to get any government help in paying the interest on your mortgage. At one time there was a waiting period of nine months, which has been reduced to three. At the same time the limit has been raised to 200,000 pounds of your mortgage from the previous 100,000 pounds.

If you’re struggling to meet mortgage repayments, do contact your lender and ask for their advice. By contacting them and paying just as much as you can, it’s more likely that you can reach some sort of agreement which might make the difference between staying in your home or not. It could be that your lender could offer to reduce your repayments for a time, extend the term of your loan or even adding arrears to the mortgage. It depends on your own personal circumstances and it’s very well worth talking it though with your lender.

Hopefully things will get back to an even keel and all this will have been a salutary lesson and it will be a long time before people take financial security for granted.