A Guide to Handling Mortgage Arrears

Mortgage arrears are not something to take lightly and you need to take action as soon as possible! Falling behind on even one mortgage payment is a big red flag to your mortgage lender and any future lenders, that there may be a potential risk in lending to you. If you fall into mortgage arrears it is important to act fast and not to ignore this as it will only make it worse and could end with your home being repossessed by the lender.

Here are the most important steps to take once you have missed your mortgage payment:

Step 1 - Call your mortgage lender straight away

As soon as you have noticed or been notified of the missed payment, you need to ring your lender immediately to inform them that you are aware of this! Your lender is the one who can help you the most in this situation and can discuss the different support options they have for you and how to make the payment needed to get you back on track. Inquire with them about the support options they might have to help you pay your mortgage payments. Once you have made your mortgage payment, give us a call and we can see what your lender can do to help you, such as we can look at increasing your mortgage term to reduce your monthly payment.

Step 2 - Review your finances

Now it is time to sit down and review your finances. Print out 3 months worth of your bank statements and highlight what is important in one color and what is not in the other. This will help you see where you are spending your money each month. Look at your subscriptions and monthly direct debits to see what is important to you, such as things like Spotify, phone app subscriptions, these can be cancelled until you find your feet again. Other payments such as your phone contract, broadband, food shopping, can these be reduced? Is there lower tariffs you could swap to?

If you have income protection insurance and the reason you are struggling to pay your payments is due to you being off sick or injured from work, now is the time to use this insurance! This insurance could pay out each month to help you pay your mortgage payment, bills and general outgoings, depending on how much you are covered for. If you haven't got this insurance, it is something to look into once you are back on your feet! Don't forget, we can set it up for you!

‍