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What Can I Do If I Fall Behind on Mortgage Repayments?

If you fall into mortgage arrears you need to take action now. Your mortgage is one of your priority debts and failing to meet your repayment requirements can result in your home being repossessed. This is the worst-case scenario and can be completely avoided if you start making arrangements now. Below, we highlight the best course of action should you have fallen behind on your mortgage repayments.

What are mortgage arrears?

Even if you miss one mortgage repayment, you are in arrears. Owing any money on your mortgage is taken seriously unless rectified quickly for a minor reason, such as there being an issue with your bank. The worst thing you can do is let the amount increase month on month without taking any action. If you are in mortgage arrears and have not contacted your mortgage provider it is wise to do so immediately.

What happens when I call my mortgage provider?

It can be daunting when you reach out to your lender. However, rest assured, they will be completely understanding to your situation. As you are their customer, they will be able to help you put together an action plan. The best thing you can do is keep lines of communication open and honest with your mortgage lender. This enables both parties to be on the same page and allows for a solution to be determined together.

Your mortgage provider is not going to take your property away from you on the spot. It is their job to discuss ways to resolve the issue with you. Within 15 days of you falling into arrears your lender must inform you of the following in writing (even if the conversation was via a phone call):

  • The total outstanding sum currently
  • Dates of the payments you have missed
  • The total outstanding mortgage amount in full
  • A repayment plan timescale
  • That all charges incurred because of late payment are cleared

Your mortgage lender will exhaust all options to help you before seeking legal action. They want you to remain in your home. Repossession is always the last option for providers.

So, how can you help the situation in the meantime?

Do you have insurance to cover you?

If you have failed to meet your mortgage repayments due to being made redundant or cannot work due to illness or an accident check if you have Mortgage Payment Protection Insurance. This can also be referred to as Accident, Sickness and Unemployment Insurance. If you took a policy out privately get in touch with the provider, explain your situation, and get the ball rolling for eliminating your debt.

Don’t panic if you don’t have private cover of this nature. Contact your mortgage provider, sometimes it is included in your mortgage or you may have selected it as an added extra when securing your home. If so, you will be able to receive help with your mortgage payments.

Failing this, there are other options to help you get out of arrears.

Can family or friends lend you money?

Nobody likes having to borrow money from loved ones but when it comes to mortgage arrears you need the help. If your family and friends are financially able to help you this can relieve your stress whilst you try to get to grips with your outgoing monies.

Even if the value of the full arrears cannot be met, get in touch with your lender and explain you have managed to get some funds together. More often than not they will accept this payment towards your arrears whilst you try and secure the remainder. If the amount is relatively close to the money you have outstanding some lenders will split the remainder across other month’s repayments. Remember, always keep your mortgage provider in the loop and pay what you can, when you can.

Can you decrease your monthly outgoings?

If life has thrown you a curveball and your outgoings currently outweigh the money you have coming in every month take a look at your bank statements. Decipher where you could save money. When times are hard some people SORN their cars – this means you won’t be paying any tax or insurance on your vehicle. Could you switch from a contract phone to a SIM only or Pay As You Go plan? Streaming services, memberships, shopping, and meals out will have to be put on pause as these can eat into your monthly spend.

Another great way to save money is to assess your utilities – are you getting the best deal on your gas and electricly tariff? You could also shop around for a better broadband deal or scrap it altogether for a few months.

How can I stop repossession?

If you have explored all avenues and you simply cannot meet your mortgage repayments, you may want to consider selling your house. This puts the ball in your court and avoids your home being repossessed and damaging your credit rating for borrowing in the future.

A fast house sale would allow you to pay off your arrears and have some money in the bank to put towards a new affordable property or a rental home. You will have space to breathe and focus on your next steps without your mortgage provider having no other choice but to take legal action and repossess your home.

If you are in financial difficulties and are considering selling your home, get in touch with the friendly team at SOLD.CO.UK today on 0800 566 8490. We can sell your house in a timeframe that suits you and will support you regardless of your circumstances.

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