First Steps
It is important that you contact your lender if you are in mortgage arrears and attempt to come to an agreement. Your lender, if appropriate, may be able to:
- arrange temporary payment arrangements
- lengthen the term of the mortgage
- switch temporarily to interest only
- look to reduce your payments if your income has changed
- consolidate your arrears if you can start paying in full
Your options will depend on:
- the type of mortgage you have
- how far behind you are with payments
- the reason you're in arrears
- if your financial problems are likely to be temporary or more long-term
See our advice on ensuring you have finances are as healthy as they can currently be and write to your lender with an affordable and realistic proposal to tackle the arrears.
Help to budget
If you are worried about keeping up with your mortgage payments or are struggling with other debts, there are also lot of independent organisations who can offer free and impartial advice:
- StepChange Debt Charity website has lot of useful information. Get help online or call: 0800 138 1111 (lines open Monday to Friday 8am to 8pm and Saturday 9am to 2pm).
- National Debtline offer free, independent advice and they have an online service called My Money Steps, or call: 0808 808 4000.
- Wave Community Bank is a credit union offering safe savings and affordable loans for Kent residents. Family Saver Loans help families borrow for family needs and are repaid using child benefit. All loans have a savings element to repayments so borrowers build their savings as they repay the loans. Join and saving online or via the mobile app. Phones are open Monday to Friday between 9.30am-1.00pm and emails between 9.30am to 4.00pm. Call: 0300 303 3188 Email: info@wavecb.org.uk.
- Moneyhelper is a free and impartial service set up by the Government. Visit the website or call: 0300 500 5000.
Income Maximizing
Your mortgage is a priority debt. Looking at your financial situation and working out how you can pay your arrears and keep up with future mortgage payments has to be a priority.
If you need help managing your finances you can complete a budget planner to help to maximize your income at: folkestoneandhythehomelessness.entitledto.co.uk.
If you are in receipt of an income-based benefit, you may be able to claim Support for Mortgage Interest (SMI) payments. SMI is offered in the form of a loan which must be repaid when you sell or transfer the ownership of your home. Further information on SMI is available here.
Taking in a lodger
If your mortgage agreement or lease allows, you could consider renting out any spare bedrooms you may have. If you do need permission, make sure you secure this and don’t move someone in as you could be in breach of your agreement which could result in your lender or freeholder taking you to court. You can find more information on this subject here.
If you are considering taking in a lodger, make sure you seek advice from your local council, Citizens Advice, Shelter or other professional agency. It is important that you do this as you will have responsibilities as a landlord to undertake checks on your prospective lodger. This includes checking whether they have the right to rent in accommodation as well as the fact that any extra income may impact on other benefits that you receive for example.
What to do if you can’t agree a payment proposal with your lender
If you remain in mortgage arrears, your lender will have to adhere to a set of ‘pre-action protocol’ rules before they can apply to court, to ensure that this is always the last resort. They must try and discuss your finances with you and give you a reasonable chance to pay off any outstanding arrears. They must also send you a leaflet containing advice on how to keep your home.
For more information go to: england.shelter.org.uk/housing_advice/repossession.
Make sure you approach your local council for further advice at the earliest opportunity to discuss your options. There are many ways to try and prevent repossession, but this depends on you being proactive from the earliest point.