Guarantors
If you can’t take out a mortgage yourself because you of your illness, then it may be possible to have someone be the guarantor for you. This is someone who guarantees to pay your mortgage if you can’t. The guarantor may also have to arrange any necessary insurance. A suitable guarantor must have enough income to cover your mortgage and their own, if they have one. Your financial adviser, potential lender or insurance company will be able to explain the possibilities to you.
If you have a mortgage
If you are diagnosed with cancer, you are not obliged to tell your mortgage lender. If the mortgage can be paid as usual then you don’t need to do anything.
But your mortgage repayments may be affected by your illness. You may have to take time off work and your income may drop. You may then have trouble meeting your mortgage payments. If you are having financial difficulties or are behind with your repayments, then tell your mortgage lender as soon as possible. Lenders should be sympathetic towards borrowers’ financial problems and should offer positive solutions. After all, it is in the lender’s interests to help you out. The seizure of the house as security for the mortgage is usually the last resort. Your lender may be able to
Suspend your repayments for a short period or
Reduce your payments to interest only for an agreed period
If you have a repayment mortgage, reduce your repayments and extend the term or duration of your mortgage
Many mortgages are issued with some form of insurance which will cover repayments for a certain period of time. If you are off work, you may wish to call on this insurance to help cope with or to maintain your mortgage repayments. You should contact your insurer as soon as possible. This can be very important it is usually 2 or 3 months before the insurance pays out (this is called the ‘period of notice’).
If you are having financial difficulties, then you might consider telling your mortgage lender (consult your financial advisor first). Only if the lender is aware of your situation can they offer advice and put in place temporary measures (such as the suspending or reducing your repayments).
Help with mortgage repayments
If you are having financial difficulties and have no insurance, you might consider telling your mortgage lender as soon as possible (consult your financial advisor first): they may be able to suspend repayments for a short period, reduce payments only to the interest for an agreed period, or for repayment mortgages, reduce your repayments and extend the term or duration of the mortgage.