What to do when you can't meet your mortgage payments
Many homeowners have problems paying their mortgages, often when they lose a job,
split up with a partner or have unexpected expenses.
If you're struggling to pay, you need to act quickly - even if the problems are
only temporary.
1. What should you do?
Do something now – the problem won't go away
The sooner you contact your mortgage lender to discuss your difficulties, the better.
They need to know if there are specific reasons why you cannot make the payments.
Contact your mortgage lender for help
All mortgage firms regulated by the FSA have to take into account their customers’
circumstances and treat them fairly. If you are in arrears, your lender will have
a set procedure for dealing with your case. Contact them to find out if they can
help you.
Get advice
It may be a good idea to get some free and independent advice. Various advice agencies
specialise in this area and can help you plan how to solve your problem. View our list of
useful contacts.
Do a personal budget (advice agencies may be able to help you with this –
see useful contacts).
This is a list of your income and spending and will
help you see where your money is going and plan your future spending. Use this plan
so that you pay all your essential spending commitments such as the mortgage, utility
bills (gas, electric, water), insurances, council tax and housekeeping first. Financial
Services Authority What to do when you can’t meet your mortgage payments MA2
Pay what you can
Even if you cannot pay the full monthly payments, continue
to pay what you can afford. Your mortgage lender is more likely to be sympathetic
if you can show you are willing to make an effort to pay something – this may significantly
increase your chances of keeping your home.
Consider changing the way you repay your mortgage
If you have a repayment
mortgage and your difficulties are short term, you could ask your mortgage lender
to accept interest-only payments for a time. This means you will not be paying anything
off the capital amount. You will then need to catch up on your payments towards
the capital.
Tell your mortgage lender what you are doing
Your mortgage lender will be
better able to respond to your difficulties if they understand the action you are
taking.