If you can't meet your mortgage repayments, or you're worried you might fall behind, contact your lender as soon as possible. You can also get free independent advice from other organisations and you may be able to get help with your mortgage from new schemes starting in early 2009.
Contact your lender and agree a plan
Mortgage lenders are keen to help their customers sort out any payment difficulties. They may be able to come to a payment arrangement with you.
If you're struggling to make the payments
Depending on your payment history and whether your difficulties are likely to be long or short term, your lender might agree to:
reduce your payments for a set period
charge you interest only for a while, if you've got a repayment mortgage (usually you pay capital and interest)
give you a 'payment holiday'
extend your mortgage term to reduce your payments
If you're already in arrears
If you've already fallen behind, your lender will suggest a way to pay off the arrears gradually, alongside your usual payments. If you can't meet the extra payments, you may be able to delay them for a while or add them to your loan. Again, it depends on your track record.
Always pay what you can
Pay as much as you can manage every month. Keeping up regular payments (even if they vary) shows that you're committed. Your lender's more likely to treat you sympathetically and you'll minimise the arrears charges too.
You can find more mortgage payment advice from the National Homelessness Advice Service.
Are you worried about your mortgage? Opens new window Help with your mortgage
Find out different ways in which you may be able to get help if you’re in difficulty with your mortgage payments.
1: Mortgage Rescue scheme
The Mortgage Rescue scheme may help if you are having serious difficulties making your mortgage repayments and are in danger of becoming homeless if repossessed.
Mortgage Rescue scheme 2: Homeowners Mortgage Support
Homeowners Mortgage Support (HMS) could help if your household has had a temporary, unexpected drop in income.
Homeowners Mortgage Support 3: Getting help to make your mortgage interest payments
Homeowners on certain benefits may be able to get help towards mortgage interest payments called Support for Mortgage Interest (SMI).
Getting help to make your mortgage interest payments If you took out your mortgage on or after 31 October 2004
The Financial Services Authority (FSA) regulates most mortgages taken out from this date. Under FSA rules lenders must treat you fairly and send you regular statements to keep you informed about your current arrears position. There are also rules covering what the lender must do if it intends to repossess your home.
FSA guidance on mortgage arrears (PDF document, 334K) Opens new window Help with PDFs If you don't keep up your repayments
It's very important that you don't ignore any payment problems. Mortgages are 'priority debts', which you should pay off first as your lender could repossess your home and sell it to get their money.
Work out which debts to pay off first Working out how much you can afford
Your lender can help you work out how much you can afford, but you may prefer to do this yourself. A good starting point is to write down all your income and outgoings (apart from the mortgage) and see what you've got left. The Financial Services Authority (FSA) has an online budget calculator you can use.
Use the FSA Moneymadeclear budget calculator Opens new window More on dealing with debt problems Can I get financial help?If you've lost your job or can't work because of illness
If you've lost your job or you're too ill to work, check whether you've got 'mortgage protection insurance' to cover your payments. The insurance payments may not start straight away - so contact your insurer as soon as possible.
Benefits that might increase your income
It's worth checking if you're entitled to benefits such as Working Tax Credit, Child Tax Credit or Council Tax Benefit. They can make a real difference to your income and help with your mortgage payments.
More about tax credits Organisations that can give you free advice
You can get free independent advice about mortgage difficulties from several organisations. They'll help you work out what you can realistically afford.
Citizens Advice Bureau (CAB)
The CAB offers free, confidential advice face-to-face or by phone. Most CABs also offer home visits and some give email advice.
Find your local CAB Opens new window National Debtline
National Debtline is a free, confidential service that gives independent advice about coping with debt. You can get information online or call the helpline on 0808 808 4000 (9.00 am to 9.00 pm Monday to Friday, 9.30 am to 1.00 pm Saturday).
National debtline Opens new window Consumer Credit Counselling Service (CCCS)
CCCS offers free counselling on personal budgeting and advice about using credit. You can call their helpline free on 0800 138 1111 (8.00 am to 8.00 pm, Monday to Friday).
Online tools and help from the CCCS Opens new window Community Legal Advice
Community Legal Advice offers free information about legal problems and can put you in touch with local advisers. You can get information online or call the helpline on 0845 345 4345 (9.00 am to 5.00 pm, Monday to Friday).
Community Legal Advice Opens new window Mortgage shortfalls after repossession
If your lender repossesses your home, they'll sell it to get their money back. But if it sells for less than you owe them, they may want you to pay back the rest of the debt (the 'mortgage shortfall').
This is no longer a 'priority debt', which means your lender can't claim any more of your possessions or assets. But they can try to recover the debt for a long time - up to 12 years. The National Debtline website gives advice about what to do if you're being asked to make up a mortgage shortfall.
Advice on dealing with a mortgage shortfall Opens new window
No comments:
Post a Comment