Loan Arrears

17 September 2008
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Some home owners have problems paying their mortgages. This could be for many different reasons such as the end of a relationship, the loss of a job, or unexpected expenses such as having a baby.

If you are having financial problems, you need to act quickly, even if the problems are only temporary. If you don't, you could lose your home.

Act quickly

If you fall behind on your mortgage payment contact your lender.If you are currently in arrears contact your lender today.

If you have difficulty paying your mortgage (or think that you will have, for example because you have lost your job) it's important that to talk to your lender as soon as possible. Don't be put off because you think your situation is hopeless. There is often a solution. If you haven't yet decided what to do about the problem, explain to your lender that you are going to get specialist advice about your options.

Pay as much as you can

Paying your mortgage has to be your top priority, even if you are under pressure to pay other debts as well. Losing your home through repossession would only make your debt problems worse, so it's essential to keep paying as much as you can afford. This will help to stop your mortgage arrears from rising too quickly. It will also show your lender that you are trying to tackle the problem.

Mortgage payment protection insurance

Do you have insurance that would keep up your repayments for a time if you are unable to work because of illness, accident or being made redundant? Some people take this insurance out when they first take out their mortgage and then forget that it exists, as it may be included in your monthly mortgage payments.

We offer this insurance both at the outset of a mortgage and also with existing customers There are ceratain time restrictions before a claim can be made.

Be cautious when remortgaging

If you have lots of other debts as well as your mortgage, you may be tempted to take on a larger mortgage with another lender. This may enable you to pay off clear your debts. We offer remortgage facilities to customers with good credit history.

The best way for you to sort out your payment problem will depend on your individual circumstances. If you want to stay in your home, you will need to find a way of stopping your arrears from rising while keeping up with your future payments. You also need to pay off any arrears that have built up so far. To do this, you need to consider:

  • cutting back on non-essential spending
  • increasing your income (through wages, welfare benefits or renting out a room) extra work
  • reducing your mortgage and/or insurance costs If none of these options are possible, or you want to leave, you may decide to sell your home voluntarily and move somewhere more affordable.
  • You may also be tempted to give your keys to your mortgage lender, but this will probably increase your debts.

Get advice

Working out your options can be complicated. You may want to get independent advice before you decide what to do. An adviser may be able to help you to negotiate with your lender. You can get free, specialist advice from a housing aid centre, citizens advice bureau.

Many agencies have specialist advisers who can help you work out what option is best in your situation. Use Advice Services to find a service in your area.