Can’t repay your mortgage? What to do?

What should you do?

■ Do something now – the problem won't go away

The sooner you contact your mortgage lender to discuss your difficulties, the better. They need to
know if there are specific reasons why you cannot make the payments.

■ Contact your mortgage lender for help

All mortgage firms regulated by the FSA have to take into account their customers’ circumstances and treat them fairly. If you are in arrears, your lender will have a set procedure for dealing with your case. Contact them to find out if they can help you.

■ Get advice

It may be a good idea to get some free and independent advice. Various advice agencies specialise in this area and can help you plan how to solve your problem.

■ Do a personal budget

(advice agencies may be able to help you with this – see Useful contacts ). This is a list of your income and spending and will help you see where your money is going and plan your future spending.

Use this plan so that you pay all your essential spending commitments such as the mortgage, utility bills (gas, electric, water), insurances, council tax and housekeeping first.

■ Pay what you can

Even if you cannot pay the full monthly payments, continue to pay what you can afford. Your mortgage lender is more likely to be sympathetic if you can show you are willing to make an effort to pay something – this may significantly increase your chances of keeping your home.

■ Consider changing the way you repay your mortgage

If you have a repayment mortgage and your difficulties are short term, you could ask your mortgage lender to accept interest-only payments for a time. This means you will not be paying anything off the capital amount. You will then need to catch up on your payments towards the capital at a later date.

■ Tell your mortgage lender what you are doing

Your mortgage lender will be better able to respond to your difficulties if they understand the action you are taking.

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