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Mortgage arrears and you
Help with mortgage arrears and the options available to you
For the majority of us our homes are funded by a mortgage and ensuring that the mortgage payments are met and bills are paid is an important part of a happy family life. There can come a time when payments to your mortgage get missed or are paid late which can result in mortgage arrears, bearing in mind a mortgage is typically the largest investment people make and as such is one of the most important investments we make its not surprising that when the mortgage payments are missed it can effect every aspect of your life, not just financially but emotionally - its your family home after all. We have noted below a few ways that may help alleviate some of the stress and worry that comes with missed mortgage payments and hopefully help put you back on track.
I have missed mortgage payments and now have mortgage arrears
- what can I do?
Missed mortgage payments are worrying at the best of times and knowing or trying to figure out how to rectify them can sometimes seem impossible. In many cases you may be able to pre-empt the missed payments if you know the funds are not going to be there when the mortgage company applies for the money - if that is the case then you can contact your mortgage company and let them know you are having financial difficulties and inform them the payment will be late. Most lenders will try and help you over come 
any issues and may even be able to offer you reduced mortgage payments or a payment holiday or it could just be a case of needing to change the date the mortgage is paid to come more in line with when you receive you income.
If you are unable to stop mortgage payments being missed or did not know there would be insufficient funds then you should contact the lender as soon as possible to explain your situation and try and agree a payment plan for clearing the missed payment or payments. Only offer what you can afford and not a penny more towards your arrears as the last thing you want to do is arrange a repayment plan you can not stick to.
I can not afford my mortgage payments or mortgage arrears
If the missed mortgage payments have come about due to you not being able to afford the monthly payments the first thing we would suggest is you ask yourself what has changed financially to make them unaffordable? have you had a drop in income? have the interest rates gone up? have you taken on more debt which is being paid at the expense of your mortgage payments?
Once you know what is causing the once affordable mortgage payments to be missed then you can put a plan in place to put things right. If the mortgage arrears are due to a drop in income we may be able to offer some simple solutions short term to help you work your finances out long term. If the mortgage arrears are due to increased mortgage interest rates then you may want to look at a remortgage to try and reduce your monthly mortgage payments. Alternatively you may want to reduce your monthly creditor payments thus leaving you more money to afford the normal monthly mortgage payments.
I have missed mortgage payments due to a drop in income and now have mortgage arrears
Every situation is different but often a solution may be the simplest one. If your income has been reduced then this will undoubtedly have an affect on your standard of living and can affect mortgage payments. In times when income has dropped we sometimes try to keep the same standard of living, we eat out at the same places and just as often, we still spend money on things we want instead of things we need and most of us can be accused of unnecessary spending - a mistake a lot of people make is not changing their lifestyle to come more in line with their drop in earnings. It would help to prioritise your outgoings, make sure things like mortgage, gas, electric, food, council tax, creditor payments etc are paid first then whatever is left is yours to spend as you see fit. We have spoken to many people who have had a slight drop in income but have not altered their standard of living and as a result the household bills (such as mortgage payments) suffer.
Certain people also consider getting a second job to subsidise the drop in income, although this is not always possible and this would not necessarily be a permanent fixture it may allow the normal mortgage payments to be maintained and stop the mortgage arrears accruing whilst you looked into ways of increase your main income by either moving to a better paid job or re-negotiating your salary with your current employer. If you are self employed then a part time job could give you the breathing space required until you can increase your income to a level that will sustain you mortgage payments and lifestyle. Or you may be able to remortgage onto a better interest rate which may result in lower monthly mortgage payments which you may find more affordable.
I have missed mortgage payments due to a rise in interest rates
If your mortgage payments have increased due to higher interest rates which are making mortgage payments unaffordable to the point where you have mortgage arrears then you need to look at altering the mortgage rate or look at how the mortgage is being repaid.
Altering the mortgage rate can be easier than it sounds, you could simply apply for a remortgage with another lender who is offering a better rate. If this is the option you are looking for then it's important to apply for a remortgage as soon as possible to minimise the missed payments - the more missed mortgage payments and mortgage arrears the higher the new interest rate will be, you should also consider any repayment charges which may apply to your existing mortgage - although if the rates has increased its likely you have come to the end of a special deal period which should mean there are no huge repayment penalties.
You could speak to your existing lender and ask if they have any better rates they can switch you onto - for example, they have be able to transfer your mortgage onto a fixed rate which could reduce your monthly payments and stabilise the monthly mortgage payments which would make budgeting easier.
If you are unable to switch to a new lender and your existing mortgage lender will not put you onto a new rate due to the arrears then your choices are limited. The only other way of reducing your mortgage payments would be if you are currently paying on a repayment basis (capital and interest), if you are it may help to switch the payments onto interest only which would lower the monthly payments - this would mean that no capital is being repaid off you mortgage loan but it should mean you are able to meet the contractual monthly payments and once things have improved - when you can switch to a new lender or better interest rate, or increase your income you should be able to switch back to a repayment mortgage.
Sometimes, if things change drastically the only option left is to downsize or sell the property and walk away. Whilst this may be a last resort, if the mortgage payments and mortgage arrears are truly not manageable it may offer the most suitable solution.
I need help with mortgage arrears - what should I do
Getting help with your mortgage arrears couldn't be easier, simply fill in the quick enquiry form at the top of this page and we will call you back.
...sound, straightforward advice that works - contact us today
