Mortgage Arrears

I AM HAVING TROUBLE PAYING MY MORTGAGE – WHAT SHOULD I DO?

If you find you have difficulty paying your mortgage, or you think you may have a problem in the future, you should contact your lender as soon as possible.

You will find a sympathetic voice at the end of the telephone or in the branch. Staff are trained to assist customers experiencing financial difficulties in an individual way and recognise that it can be a very difficult conversation. They also understand that most repayment problems are not your fault, but are
usually caused by circumstances out of your control such as interest rate rises, bereavement, relationship breakdown or losing your job. Doing nothing is the worst thing you can do.

WHAT WILL HAPPEN ONCE I HAVE MADE CONTACT WITH MY LENDER?

Lenders will have their own procedures for dealing with people experiencing difficulties. This will usually involve you jointly developing a repayment plan. A repayment plan will involve you listing your income and expenditure to see where savings can be made.

This repayment plan may allow you to:

• Make reduced or no payments for a short period of time

• Increase the length of your mortgage loan and therefore reduce your monthly repayments (not applicable for interest-only mortgages)

• Add arrears to the outstanding mortgage amount rather than repaying them immediately.

Lenders are not able to accept reduced mortgage repayments indefinitely, and in the long term a repayment problem will have to be resolved. Arrears will then be regularly discussed with you to see how the repayment plan is going and to see if any changes are required.

It is vital you are upfront with your lender about your true financial commitments and the situation that you are in. Doing so means that that a solution can be developed that suits both you and the lender.

FIVE STEPS TO DEALING WITH PAYMENT DIFFICULTIES

1. Contact your lender as soon as possible to tell them your problems
2. Be totally honest with them about your situation
3. Work out a repayment plan with your lender
4. Keep a close eye on your finances to make sure you are able to keep up with the agreed plan
5. If you are having any difficulties keeping to the plan, contact your lender again and see if it can be reviewed.

WHERE CAN I GO FOR HELP?

Although your lender will try to provide you with any further help that you need, there are other organisations you can contact. You do not need to pay for debt advice. Any of the organisations below will be happy to help you.

• Your local Citizens Advice Bureau will give free, independent and confidential advice. They can help you work out repayments and negotiate with your creditors. For details of your local CAB, including those that give advice by email, go to www.citizensadvice.org.uk

• National Debtline is a national phone helpline for people with debt problems in England, Wales and Scotland. Their service is free, confidential and independent. Call freephone 0808 8084000 or log on to www.nationaldebtline.co.uk

• Shelter’s website, Housing Aid Centres, helpline, email advice service and housing support projects give free, confidential, expert advice to people in
housing need. Go to www.shelter.org.uk or call freephone 0808 800 4444 (except for Northern Ireland which is 028 9024 5640).