Arrears Bad Credit Mortgages? Mortgage Arrears explained…
If you’re in the unfortunate position of having missed one or more monthly mortgage repayments, your mortgage account instantly goes into arrears.
That is until you make the appropriate payment to bring your account back up to date.
However, if you continue to miss the mortgage repayments, your mortgage lender ultimately has the power to legally repossess your house. However this is the worst-case scenario, and you can take solace from the fact the majority of people who experience mortgage arrears do not end up losing their homes.
So if you are in difficulty and can’t make your mortgage repayments, or if you’re simply worried you might fall behind shortly, it’s important to communicate with your mortgage lender as soon as you can.
All mortgage lenders have procedures in place for tackling payment difficulties and they are legally obliged to try to help under the FSA’s ‘treating customers fairly’ mantra.
Therefore depending on your payment history with your mortgage provider and whether your difficulties are likely to continue in the long or short term, your lender might well agree to one of the following:
1) If you already have mortgage arrears:
If you’ve fallen behind already, your mortgage lender may suggest ways to pay off your arrears in a gradual process, together with your usual monthly payments.
If you find that you can’t meet the additional payments, you could negotiate to delay the payments for a while or add them to your loan but be aware this will incure considerable interest over the term of the mortgage.
However all options depend on your track record.
2) Always pay what you can towards your mortgage payments:
Pay as much as you can reasonable manage every month, don’t pay so much that you can’t survive otherwise you’ll make thing worse by missing further payments in the near future.
It’s essential to keep up regular payments even if they do vary, as it shows you’re committed and are acting reasonable.
The mortgage lender’s more likely to treat you sympathetically if you do this and it will minimise the arrears charges you’ll incure as well!
Obviously missing mortgage payments and acquiring mortgage arrears will affect your credit rating.
This means if you needed to release equity to perhaps pay off other debts such as expensive credit card or personal loans and consolidate all debt in to one affordable payment your only option would be a bad credit mortgage.
So if contacting your existing lender has not helped just give us a call to see if The Bad Credit Mortgage Centre can be of assistance…
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