No one ever plans to miss a payment, but what happens if you do?
Pick up the phone!
Firstly, if you miss a mortgage repayment and have payments overdue, you're technically in what lenders call 'arrears'.
If you find yourself in this situation it's important that you make contact with your lender straight away - pick up the phone and give them a ring. Being proactive is the most important thing and will help minimise impact.
If you don't communicate with your lender you'll automatically trigger their arrears process and start the countdown to repossession. So reach out to your lender, they'll want to help you find a solution and negotiate a new repayment strategy.
What is the arrears process?
If you fall into mortgage arrears, then within the first 15 days your lender must:
How can I have that conversation?
First thing is to remember that your lender isn’t evil, and they’re not out to get you.
If you're behind on mortgage repayments the most important thing is to be proactive. The sooner you talk to your provider and explain the situation, the sooner you can try and negotiate a repayment plan that makes things feel a bit more achievable.
You might even be eligible for government help, but to claim you'll need to speak to your provider first.
You can try presenting these solutions to your lender:
When talking to your lender, the most important thing is to make the first move. If you contact them ahead of time or as soon as you miss a payment, they are much more likely to be accommodating and work with you on a solution than if they have to hunt you down.
What should you do if you haven’t missed a payment yet, but are worried about it?
Again, the first step here is to call your lender. If you’ve not yet missed a payment but you’ve had a loss of income and need some support, the best thing is to get ahead of the problem.
Since the Covid-19 pandemic began in March 2020, the Financial Conduct Authority (FCA) set out a series of rules for lenders to follow to help those struggling with their finances. This means:
If you are looking to have a payment holiday you will agree to a personalised plan for your circumstances with your lender.
Is a repayment holiday right for me?
A mortgage repayment holiday could help relieve some of the immediate financial pressure that you may be under. However it’s important to keep in mind that the terms of your mortgage repayments will change once the payment holiday is over. You should carefully consider what the impact of taking a mortgage holiday will be on your day-to-day finances in the longer term.
A mortgage holiday could give you some financial headspace and help you get through a difficult period, but it’s important to ensure that it will help you long term and not simply delay the problem
Need more help?
If you need further support you could try Stepchange’s free online debt advice tool to create a tailored budget and to receive a personalised action plan. Or call Stepchange directly (free from all landlines and mobiles) and speak to one of their expert advisors.
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