Mortgage Arrears

Dealing with mortgage arrears

Mortgage arrears are simply the term used to describe missed mortgage payments. Your mortgage will get into arrears if you do not maintain the monthly repayments that you have agreed with your mortgage lender.

There may be many reasons why your mortgage is getting into arrears. Perhaps your income has reduced or the amount you have to pay towards other debts and living expenses has increased. Alternatively the cost of your mortgage may have increased.

Whatever the reason falling behind with your mortgage payments can lead to very serious problems for you and your family as they could lead to the repossession of your home.

How to avoid mortgage arrears

If you are concerned that your mortgage might be at risk of getting into arrears then there are a number of things you can consider to prevent this from happening and to protect your home. If you have a temporary financial problem it might be possible for you to agree a simple payment holiday with your lender. However if  your circumstances are not likely to improve any time soon then you will need to consider a longer term solution such as agreeing a reduction in the cost of your mortgage with your lender or reduce your expenses in other areas. These options are explained in more detail here.

Dealing with a mortgage in arrears

If you have missed any of your mortgage payments and have not been able to catch up with these then your mortgage is in arrears. This is a very serious situation. Even if you have not yet been contacted by your mortgage lender about your arrears unless you resolve the problem it could result in them taking action against you to repossess your home. The options open to you to resolve this problem will depend on your financial situation. If your difficulties were temporary then the solution could be relatively simply. However if you are facing longer term financial problems then a more permanent resolution will need to be found. Information about the different ways you can resolve a mortgage arrears problem are available here.

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Shared ownership mortgage arrears

Is yours a shared ownership property? If so and you do not maintain your mortgage payments then you will get into arrears and it is possible for your mortgage lender to apply to the court to repossess your property which would mean that you would have to leave. If your shared ownership mortgage is in arrears you need to act now to prevent this situation. Information and advice about how you can resolve your shared ownership mortgage arrears problem is available here.

The Mortgage Pre Action Protocol

If your mortgage is already in arrears you will be worried about what action your mortgage lender could take against you and your property. Ultimately they do have the option to apply for a Court Order to repossess your home and sell it to recover the money you owe them. However before any mortgage lender can do this they must follow some strict guidelines which are designed to try and help you save your home. Details about these guidelines are given here.

Voluntary repossession

If your financial circumstances have changed to such an extent that you simply cannot continue to pay your mortgage then the option you may need to consider is selling your home. The issue you face is that you will need to sell quickly to prevent your mortgage lender from taking action against you but your ability to do this will depend on the amount of equity in your property. If selling your home is impossible because it is in negative equity then what do you do? The answer could be to allow your property to be voluntarily repossessed. All the information you need about the voluntary repossession process and its implications is available here.

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