Mortgage Arrears action plan

When your mortgage payments have gotten too much to manage, you’ll need to come to an agreement with your mortgage lender. Contact your mortgage lender to let them know you are having payment difficulties in order to prevent them from taking immediate court action. If they take court action, they may be able to take you home from you and sell it in order to pay off your debt. If you contact them, it may buy you some time to organize your next payment, or compromise a temporary lower payment scheme.

How to reduce your monthly mortgage expenses

Reducing your monthly mortgage payment on either a temporary or permanent basis will make it easier for you to catch up on your arrears and start tackling your debt head on. Here’s ways to start:

1. Talk to your lender
The first thing to do when you are in mortgage arrears is to contact your mortgage lender. Depending on you lender and mortgage, you may be able to:
• Lower your monthly payments. This means you’ll be paying your mortgage over a longer period of time, and hence end up paying more interest in the long term.
• Make interest only payments. This means you’ll be suspending repayments on your capital (the amount you borrowed).
2. Change your mortgage lender
Alternatively, you can look around for a cheaper mortgage deal. Be aware that if you do change lenders, any arrears already on your mortgage will still have to be repaid to the original lender, and you also may have some charges for changing lenders.
3. Alter your Endowment policy
Reducing or temporarily pausing payments of your endowment policy should never be done without seeking financial advice first. Because the process can be confusing and risky, make sure you consult a financial advisor first. If you stop making payments, you will still have to make them at a later date.