If you are in arrears with your mortgage repayments or worried about losing your home completely you may be tempted to ignore the situation and hope it will go away. This is what you can do and where you can find the help and support you need.
Contact Your Mortgage Lender
Don’t be afraid to contact your mortgage lender as they will be keen to help you and advise on the options you have available. As your mortgage lender they must make a reasonable number of attempts to come to an arrangement with you or change the way you make the mortgage repayments or when you make the payments.
Your mortgage lender must do the following if you fall into arrears within 15 days –
- Tell you the total amount of money owed as a result of missing the mortgage repayments.
- Let you know the total amount of money outstanding under your current mortgage arrangement.
- They must give you a reasonable time period to resolve the mortgage repayments.
- Your mortgage lender must tell you the amount of any charges that have been incurred as a result of missing the mortgage repayments.
Only if all reasonable offers have failed to resolve the situation your mortgage lender could seek means of repossession. And even then, they must give you a reasonable amount of notice before such action takes place.
You Might Have Insurance Cover
Mortgage Payment Protection Insurance can assist you with your mortgage repayments if you monthly income has decreased due to accident, sickness or redundancy. Make sure that you look through any paperwork you have as you might have taken it out when you first got you mortgage. You can also contact your mortgage lender to double check whether you have it or not.
Cut Down Your Spending
Spend some time looking at your spending habits to see if there are any areas where you can be saving money. Have a look through your outgoings and compare it to what you have coming in and then decide what you deem as non-essential and essential items. This can be done by simply looking at your current account using online banking. Cutting down your spending you will give you extra money that you can put towards your mortgage repayments.
If You Are Struggling Then You Need to Speak to Someone
As well as talking to your mortgage lender you can also get advice from many different debt advice organisations and charities. An experienced money advisor will be able to give you free and impartial advice about your debt.
You Might Be Able to Get Financial Help
Depending on your circumstances you might qualify for certain benefits or help from the government. You can use the benefit calculator on GOV.UK to find out more and whether you qualify for such benefits.
Consider Selling Your Home
If you know that your financial situation won’t be changing for the long term then you need to consider selling and moving home and relocating to a cheaper property or start renting instead. If you are considering selling your home then ask your mortgage lender if you can stay in the property until you manage to sell it. But, make sure that you have a stable place to live before moving home.
Things You Should Avoid
If you are considering doing any of the following things then seek the advice from a debt organisation before you take any action.
- Selling Your Property Without Sourcing A New Place to Live
If your local council think that you have made yourself homeless on purpose then they might not help you find a place to live.
- Taking Out More Loans
Taking out additional loans can cost you more money as they are generally very expensive especially pay day loans. Don’t be tempted to apply for a new credit card as it won’t resolve your financial situation.
- Giving Back the Keys
Even if you are in debt and your mortgage is in arrears you are still responsible for the mortgage repayments before your property is sold. You may also be responsible for the outstanding balance if the amount raised by selling you home isn’t enough to cover the mortgage repayments that is owed to the mortgage lender.