Introduction
Are you struggling to keep up with your mortgage payments? You’re not alone, and it’s crucial to tackle mortgage arrears as soon as possible to avoid serious repercussions. This guide offers straightforward advice on how to manage your situation effectively. If you need assistance, Contend’s highly trained AI legal experts are here to provide guidance, helping you understand your rights and options in resolving your legal challenges. With Contend, you can access the easiest legal help in the UK.
If you’re finding it hard to keep up with your mortgage payments, you’re not alone. Many people face this challenge, especially during difficult times. It’s important to address mortgage arrears promptly to avoid serious consequences. Here’s a straightforward guide to help you navigate this situation.
Take Action Early
If you’ve missed a mortgage payment, don’t wait for your lender to reach out. Typically, they will contact you within 15 days of a missed payment, but it’s best to be proactive. Reach out to your lender as soon as you realize you’re in trouble. This shows them that you’re serious about resolving the issue.
When to Seek Help
If you receive any communication from your lender about court action or if you’re expecting bailiffs, it’s crucial to seek help immediately. Try Contend’s legal expert chat for guidance. Their highly trained AI legal experts will work with you to provide support and help you understand your rights and options.
Understanding Your Options
Coronavirus Considerations
If you’re struggling to pay your mortgage due to the impact of COVID-19, there are resources available to assist you. Lenders are required to treat you fairly and consider your requests for payment adjustments.
Prioritize Your Mortgage
Mortgage arrears are considered a priority debt, meaning they should be addressed before other debts, like credit cards. If you have multiple debts, it’s wise to seek advice from a debt counselor or check out the ‘get help with debt’ guide available through Contend’s legal expert chat.
Create a Budget
Before speaking to your lender, it’s helpful to know what you can realistically afford to pay. Create a budget to understand your financial situation. You can use online budgeting tools or consult with Contend’s legal expert chat for assistance.
Informing Your Lender
When you contact your lender, let them know if you’re working with a debt adviser. This demonstrates your commitment to resolving your financial issues.
Options for Paying Off Arrears
Your lender will likely discuss various ways to help you manage your arrears. One common approach is to add a little extra to your monthly payments. For example, if your regular mortgage payment is £400 and you missed a payment, you could propose paying back the missed amount over the next four months by adding £100 to your regular payment. This way, for the next four months, you’d pay £500 each month.
Capitalizing Arrears
If your home is worth more than what you owe on your mortgage, your lender might allow you to add your arrears to the total amount you owe. This means you can pay it back over the life of the mortgage, which is known as ‘capitalizing your arrears.’
Other Payment Options
You might also consider using funds from your pension or an endowment policy to pay off your arrears. However, be cautious with these options as they can lead to more debt or increased interest rates. Always consult with Contend’s legal expert chat before proceeding.
Adjusting Monthly Payments
If monthly payments are still a struggle, you can ask your lender for alternatives, such as:
- Extending the loan term to lower monthly payments
- Switching to interest-only payments temporarily
- Taking a break from payments for a few months (known as a ‘repayment holiday’)
If you’re receiving benefits, check if you qualify for Support for Mortgage Interest (SMI), which can help cover the interest on your mortgage.
What If You Can’t Reach an Agreement?
If you and your lender can’t come to an agreement on how to pay your arrears, they may seek a ‘possession order’ from the court. This legal action allows them to sell your home to recover the debt. However, they must give you at least two weeks’ written notice before applying to the court.
For more details on what to do if your lender takes you to court, consult resources available through Contend’s legal expert chat.
Final Thoughts
Dealing with mortgage arrears can be stressful, but there are options available to help you get back on track. The key is to act quickly, communicate openly with your lender, and seek help when needed. Remember, you don’t have to face this alone—support is available.
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