Mortgage arrears

Friday, October 26, 2007

Many people experience financial difficulties at some stage during the term of the mortgage. In most cases, these difficulties can arise through no fault of their own, for example:-

illness

redundancy

unemployment

matrimonial problems

Mortgage problems are often made worse by the existence of other debts, especially if you are under pressure to pay other creditors at the expense of the mortgage.

If you are in arrears with your mortgage you should contact your Lender immediately to discuss your account.

You should always:

Pay as much as you can, even if you cannot pay the full amount.

Speak to your lender as soon as you have a problem and decide with them the best course of action.

Check which benefits you may be entitled to, not only with regard to the mortgage, but other benefits which may increase your income. You can check directly with the Benefits Agency .

Consider ways of increasing your income, for example, taking in a lodger.

Work out your personal budget to show your exact financial position

You may need to get some debt counselling advice.

A Financial statement is a useful way of checking your financial situation, these are available from Housing and Community services.

You should never:

Stop paying your mortgage. The debt will not go away.

Ignore the problem. The longer you leave it, the worse it gets. Do not delay getting help.

Give up hope. The majority of borrowers in arrears do not end up being repossessed.

Sell your home without seeking advice. Especially, if you are considering applying to the Council for help.

Abandon your home or hand in your keys to your lender. This will not end the problem. You will still be responsible for the mortgage payments, the costs of selling your home and interest on the loan. Your debt to the lender may increase after the property has been repossessed.

You could also consider remortgaging to pay off your arrears and start afresh with a new lender. This should only be considered if you can genuinely afford the new payments offered by the new lender. If you cannot afford the payments you will only be delaying the inevitable and it will cost you even more money in the process.

If you have mortgage arrears and would like to discuss your options with a representative, please feel free to call on 0845 123 1260 or apply online at www.solution-mortgages.co.uk