Mortgage prisoners are a group of people stuck in the current mortgage even though they are unable to afford the payments, often because they took out their mortgage before the financial crisis.

Mortgage Prisoner

The term mortgage prisoner is used to describe a homeowner who is not in a position to remortgage their property because of not meeting the new, stricter lending criteria, which have been set in place since the financial crises.  It is estimated that there are around 1.8 million mortgage prisoners in the UK. Meaning

Are You Trapped in a Mortgage Prison?

The homeowners are stuck in a financial prison, and you be might one among them. These homeowners do not know how to get out of the situation. It can even be dire for those who are self-employed or on low incomes, as they may not be able to find the right mortgage that meets their needs.

Consequences

The consequences of being a mortgage prisoner can be severe, leading to financial hardship and even homelessness. Mortgage prisoners are at risk of being repossessed, and many are forced to sell their homes at a loss. In some cases, people have to move into rented accommodations or even homeless shelters.

If you are currently stuck on a mortgage that you cannot afford, you are not alone!

Thousands of homeowners across the country are finding themselves in the same situation, often through no fault of their own, and this has been dubbed “mortgage prisoners”, and it’s a problem that needs to be addressed. There are several reasons why someone might find themselves in this position. For example, they may have taken out an interest-only mortgage during the housing boom and are now facing a balloon payment. Or, they may have lost their job and are struggling to make ends meet. Whatever the reason, being a mortgage prisoner can be a very stressful experience.

How to Avoid Mortgage Prisoner?

Get help from mortgage prisoner adviser!

Many of these mortgage prisoners are on standard variable rates (SVR), typically much higher than the best mortgage deals available. As a result, they find it hard to move to a more affordable mortgage, even if they have a good credit history. In some cases, these homeowners may have mis-sold their mortgages in the first place.

The good news is that there are options available to help you get out of your mortgage prison. You may be able to refinance your mortgage or negotiate a new repayment plan with your lender. Consult with a mortgage prisoner adviser and get guidance to get freed of the current mortgage situation.

Here’s how to get rid of your mortgage prisoner status and find a better deal:

• First, check if you are eligible to switch to a new lender. You may be able to do this if you have been with your current lender for a long time, or cleared all your repayments on time.
• Next, compare mortgage deals to see if you can get a better deal elsewhere. Remember to compare the total cost of the mortgage, not just the interest rate.
• Finally, make sure you can afford the new mortgage payments. Switching to a new lender may mean higher monthly payments, so make sure you can afford the new payments before you make the switch.

Your mortgage prisoner specialist will even share information about the rules of the Financial Conduct Authority (FCA), which has introduced several measures to help those struggling to switch to a more affordable deal. Mortgage prisoners can now request a ‘mortgage statement’ from their lender, which will set out the terms of their mortgage and whether they meet the criteria for a ‘standard’ mortgage. Mortgage prisoners can also request a ‘mortgage review’, where their lender will consider their case and, if they meet certain criteria, offer them a more affordable deal.

If you talk to our professionally accredited mortgage advisers at Future Planning Wealth Management, then you can Call Us. We are just a call away to provide helpful answers.