Mortgage Arrears & Difficulties
We understand how quickly you can fall behind with mortgage payments and slip into arrears. We also understand that there are many reasons why this can happen. It can be really worrying as your home may be at risk of possession. However, this type of debt should be treated as a priority and it's essential that you take action as soon as possible to try to resolve things.
Talk to your lender as soon as you can. They are usually keen to listen and to discuss possible options to help. Your lender must make reasonable attempts to come to an agreement with you to resolve the situation and must not seek possession unless all other reasonable attempts have failed.
Do you have Mortgage Payment Protection Insurance or Accident, Sickness and Unemployment Insurance? This may be with your original mortgage paperwork or you can ask your lender or broker to check for you.
Look at your budget to see if you can cut any non-essential costs to save money. Use our income & expenditure sheet to draw up a budget plan to see what you have coming in and going out each month or week. Can you cut back anywhere?
Contact a specialist debt counselling service that can provide free, impartial advice from a trained money advisor - such as your local Citizen's Advice Bureau, StepChange or National Debtline;
Find out if you can get help with your mortgage payments through benefits and/or help from the Government with interest payments. You can check this with the Turn2Us Benefits Calculator.
Consider selling your home to move to a cheaper property or rent if your situation is unlikely to change. Talk to your lender about getting help through the Assisted Voluntary Sale Scheme. Your local council or social landlord might be able to buy your home from you and enable you to stay there as a tenant.
Try not to get into debt further by taking out expensive loans to pay your arrears. This may put your home at further risk as they are often secured against your property.
Avoid handing back the keys before your home is sold as you will still be liable for mortgage payments.
If you sell your home without having somewhere else to live your local council could deem that you have made yourself intentionally homeless and will not have a duty to house you.
Be aware of sale-and-rent-back-schemes - some of these have been investigated by The Financial Conduct Authority and have been stopped for treating their customers unfairly.
Always talk to a specialist debt counselling service before taking any unnecessary or rash action.