Mortgage arrears or payment difficulties

Last Updated: 02.12.2010

Are you having problems paying your mortgage or worried you may have these problems soon?

If you can't meet your mortgage repayments, or you're worried you might fall behind, contact your lender as soon as possible. You can also get free independent advice from other organisations and you may be able to get help with your mortgage from new schemes.

Contact your lender and agree a plan

Mortgage lenders are keen to help their customers sort out any payment difficulties. They may be able to come to a payment arrangement with you.

If you're struggling to make the payments

Depending on your payment history and whether your difficulties are likely to be long or short term, your lender might agree to:

• reduce your payments for a set period
• charge you interest only for a while, if you've got a repayment mortgage (usually you pay capital and interest)
• give you a 'payment holiday'
• extend your mortgage term to reduce your payments

If you're already in arrears

If you've already fallen behind, your lender will suggest a way to pay off the arrears gradually, alongside your usual payments. If you can't meet the extra payments, you may be able to delay them for a while or add them to your loan. Again, it depends on your track record.

Always pay what you can

Pay as much as you can manage every month. Keeping up regular payments (even if they vary) shows that you're committed. Your lender's more likely to treat you sympathetically and you'll minimise the arrears charges too.

Help with your mortgage

Find out different ways in which you may be able to get help if you’re in difficulty with your mortgage payments.

Mortgage Rescue scheme

The Mortgage Rescue scheme may help if you are having serious difficulties making your mortgage repayments and are in danger of becoming homeless if repossessed.

Homeowners Mortgage Support

Homeowners Mortgage Support (HMS) could help if your household has had a temporary, unexpected drop in income.

Getting help to make your mortgage interest payments

Homeowners on certain benefits may be able to get help towards mortgage interest payments called Support for Mortgage Interest (SMI).

If you took out your mortgage on or after 31 October 2004

The Financial Services Authority (FSA) regulates most mortgages taken out from this date. Under FSA rules lenders must treat you fairly and send you regular statements to keep you informed about your current arrears position. There are also rules covering what the lender must do if it intends to repossess your home.

If you don't keep up your repayments

It's very important that you don't ignore any payment problems. Mortgages are 'priority debts', which you should pay off first as your lender could repossess your home and sell it to get their money.

Working out how much you can afford

Your lender can help you work out how much you can afford, but you may prefer to do this yourself. A good starting point is to write down all your income and outgoings (apart from the mortgage) and see what you've got left. The Financial Services Authority (FSA) has an online budget calculator you can use.

Use the Moneymadeclear budget planner

Can I get financial help?

If you've lost your job or can't work because of illness

If you've lost your job or you're too ill to work, check whether you've got 'mortgage protection insurance' to cover your payments. The insurance payments may not start straight away - so contact your insurer as soon as possible.

Benefits that might increase your income

It's worth checking if you're entitled to benefits such as Working Tax Credit, Child Tax Credit or Council Tax Benefit. They can make a real difference to your income and help with your mortgage payments.

Contact a North Ayrshire Citizens Advice Bureau if you have money worries

For FREE independent and confidential advice about mortgage difficulties contact a North Ayrshire Citizens Advice Bureau. Our Money Advisers can help with your mortgage problems or money issues. Our contact details can be found at the bottom of the page, click opening hours for our hours of business, alternatively, you can email us via our contact us page.