Missing Payments
Your mortgage is a loan which is secured on your home. If you fail to make repayments on time and in full, your mortgage provider is entitled to sell your property and reclaim the money you borrowed. It is therefore essential that you keep up with your mortgage repayments.
Try to ensure that you always have the funds you require available. Work out a budget each month and prioritise essential outgoings such as your mortgage repayments, utility bills and groceries. Remember that paying as much of your mortgage payment as you can each month shows your lender that you are committed to meeting your mortgage obligations. If you miss a repayment, your credit report will be affected, making it more difficult to obtain credit, such as personal loans and credit cards in the future.
Depending on your circumstances, you may be able to claim state benefits or tax credits to supplement your income. If you are already claiming Income Support or Jobseeker's Allowance, you could be entitled to receive a contribution to your mortgage payments: contact your nearest Jobcentre Plus to find if you are eligible. If you or your partner have reached retirement age, you may be able to claim Pension Credit. Ensure you also check whether or not you could claim from an income protection or mortgage payment protection insurance policy, both of which are designed to cover you if your income is lower due to recent redundancy or an accident or illness that prevents you from working.
In some cases, you may be able to change the way you pay off your mortgage. If you have a repayment mortgage, consider reducing your monthly payments by switching to an interest-only mortgage. Some lenders will agree to let you do this temporarily, but remember that 'capital' repayments will have to be paid at a later date. These make up the portion of your monthly payment which goes towards paying back the actual amount you borrowed.
In any case, if you are struggling to make a payment on time, inform your lender as soon as possible. Lenders are accustomed to receiving payments late and will be able to offer you advice on how to rectify the problem. Ensure you keep them updated on your situation. They have procedures in place to advise you and should consider your circumstances fully before taking further action. If you have overpaid in the past, your lender is likely to allow you to take a payment holiday, whereby you do not make payments for one or more months. Even if you have not overpaid in the past, it is worth trying to negotiate a payment holiday.
If, after speaking with your lender, you feel you would like further information, there are several organisations and charities which can offer free debt management advice, such as the Consumer Credit Counselling Service (CCCS) and the National Debtline. Try to avoid debt management companies who offer to 'lower' your outgoings by condensing them into one monthly repayment. These 'debt consolidation' schemes are often considered a last resort, and you should always take financial advice before making a final decision: the Citizens Advice Bureau may be able to offer a more suitable solution.
You may consider selling your home. However, this usually takes a long time and you are still required to pay your mortgage repayments until the sale is completed. If your lender sells your home for you, your name will also be placed on the repossession register, which means that you will find it harder to obtain credit in the future. Usually, your lender will try to sell the property as quickly as possible. However, in many cases, this will lower its selling price. If the sale does not repay your mortgage, you will still be required to pay the difference.
Ensure you seek help as soon as you are aware you may have problems meeting your monthly repayments, and keep your mortgage provider informed of any changes to your situation.
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