Many people have a mortgage and it can be a big expense compared with the other bills that they might have to pay. This means that they may find that they have to decide where to prioritise their spending. It could be that some things have to be reduced in order to afford it. However, some people choose to buy other things over paying their mortgage. Is this a good idea?
Consequences of not repaying mortgage
If you do not pay your mortgage there will be a selection of consequences. A few missed payments will probably result in extra charges. Lenders will differ in how much they decide to charge but it is likely that they will all have charges they make in this circumstance. These will be added on to what you owe in total for your mortgage. If you miss more than a few repayments then bigger consequences will happen. It is possible that the mortgage company will repossess your home and sell it to get the money that they are owed and they may give you anything that is left after they have done this. You will then have no home and a poor credit record so it will even be difficult to rent a place. You may even have to go court if the house is sold and there is not enough money to cover what you owe.
What too do if mortgage too dear
This means that if you get into trouble with your finances you need to take action before things escalate out of control. There are lots of things that you can try to do. The first thing to do is to get in touch with your mortgage company and tell them you are having problems. They might help you out by giving you a repayment holiday or reducing your repayments for a while or for the long-term and extended your mortgage term (making it last longer). They will want to help you as they want their money back.
Another possibility is that you look for an alternative lender that is cheaper. This can be costly though as there may be fees to pay your current lender and the new one, but if their rates are considerably lower it could save you money in the long run. It is worth having a look into this and thinking about whether it is something that you should consider.
You might also want to think about whether you can earn a bit more money to help out. You may be able to sell some things that you no longer need and get a lump sum of money that could help you out in the short term. However, you might also want to consider whether you can do something more long term. This might include renting out a room in your home, or perhaps storage space in your attic or garage or even a parking space on your drive. You could also think about whether you will be able to increase your income by working more hours, perhaps in your current job or by getting a second job or by working online when you get in from work. There are many possibilities.
Changing your spending habits could also be useful.
How to prioritise spending
It is really worth starting by prioritising your spending. This means that you should think about what is most important and paying for those things first. You need to pay taxes, loan repayments, mortgage, food, transport, contracts and utilities and then you can buy things which are not necessary. You will need to think about what you need the most and concentrate on that before buying treats. It can be hard to do this and you will need to have a lot of self-discipline to be able to do it. It can be worth constantly reminding yourself of why you are working so hard at this and you will be able to keep motivated more easily.
It can also be worth making sure that you are not overspending on anything. Compare prices on everything that you buy to ensure that you are not paying too much. You might find that if you switch providers or retailers you could save a significant amount of money which could really help you. If you do manage to start paying for everything that you need, then it can be wise to put some of the spare money that you have into a savings account. It will be tempting to spend it all on treats and enjoy yourself a bit, but keep some by and then you will be able to use that to help you out if you are struggling to cover the essentials in the future. You can still spend a bit but saving a bit too will be really beneficial.