Mortgage arrears and how to deal with them
If you have missed one or more of your mortgage repayments, then your mortgage is in arrears. Mortgages, second mortgages and mortgage arrears are all classified as priority debts. Because you can lose your home to repossession if you fall behind on mortgage repayments, it is important to understand how to deal with mortgage arrears.
The longer you let arrears build up, the worse your mortgage arrears situation will be. Seeking help early on, as soon as you become aware of trouble, will give you the best chance of repaying arrears and putting things right.
Top tips for dealing effectively with mortgages in arrears:
• Contact your mortgage lender immediately and start negotiations. They will be keen to help and should be able to offer a choice of solutions
• Put yourself in a position of power by getting an independent view; check the facts with Citizens’ Advice and get an independent financial advisor on the case
• Search the internet for up to the minute news, views and advice
• Pay something every month towards your mortgage repayments, no matter how small. This will put you in a strong position and show that you are ready and willing to do youR part towards solving the problem
• Ask your lender if they have a rescue scheme. Some will offer to buy back your home or a percentage of it, leaving you a tenant or part-owner. Some housing associations also offer rescue schemes
• Make a detailed list of income and expenditure in preparation. Your mortgage lender will use your personal budget to help them decide how to support you in paying back your mortgage repayment arrears
• Births, deaths, divorces and unemployment can all lead to less income. Always tell your mortgage provider if your circumstances change and you run into mortgage arrears
• Tell your lender if the property is worth much more than your mortgage. They might let you pay off your mortgage arrears over a longer time period
• Check your insurance policies to see if you’re covered in any way against losing your home. For example, do you have a mortgage payment protection policy?
• Visit the Department for Work and Pensions website and make sure you have all the facts straight about benefits. You, your partner and children could be eligible for Working Tax Credit or Income Support top-up, or disability benefits: dwp.gov.uk
For government advice about mortgage arrears: Direct.gov.uk