Mortgage arrears

Out of all the people that you may owe money to your monthly mortgage is one payment that should try to prioritise. However, it is also the one organisation that will potentially be the easiest to negotiate with as they have 'security' for their loan to you (your house).

If you are having difficulties with your mortgage payments consider the following: 

1) Contact your lender and agree a plan

If you don't ask you don't get. Your first port of call should therefore be to contact your mortgage company (as soon as possible) and ask them if they will accept a smaller monthly payment for a period of time.
 
When asking this question it is vitally important that you first work out exactly how much you can afford to pay each month. To do this use my budget planner on this website. When you contact the mortgage company tell them that you have done this exercise so that they know that you have really thought it through and therefore that you are confident that you can afford what you are proposing.
 

2) Interest only

It is possible that your mortgage company may agree to allow you to pay the interest only for a period of time. Again if you don't ask you don't get!
 
3) Payment holiday

If you believe that you will not be able to pay anything toward the mortgage repayements, but that you will be able to in the future (for example when you get a new job) then it is possible that your mortgage company will grant you a 'mortgage holiday' which means that you will not have to make the mortgage payments for a set amount of months.

4) Extend your mortgage term to reduce your payments

If you are simply unable to pay the mortgage and feel that this will not change in the next 6 months, but there is a monthly payment that you can make, you could ask your mortgage company to consider extending your mortgage term.
 

5) Change mortgage

You could obviously apply for a new mortgage with a different lender.

REMEMBER: Your mortgage company does not have to agree to 1-4 above and if they do not it will be open to them to issue possession procedings against you to take possession of your home.

If you are not happy with the way your lender deals with your case, you can make a complaint. Find out about your lender’s internal complaints procedure. If this doesn’t work, you can complain to the Financial Ombudsman Service. For more information about this service, visit www.financial-ombudsman.org.uk

 

Disclaimer

Whilst every effort is made to ensure that the legal information contained on “YouandYourRights” is accurate, it does not constitute legal advice tailored to your individual circumstances. If you act on it, you acknowledge that you do so at your own risk. Neither the Proprietor nor Dean Dunham can assume responsibility and do not accept liability for any damage or loss which may arise as a result of your reliance upon it.

 

 

Last updated: 20 February 2013

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