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Mortgage arrears

What are mortgage arrears?

If you have fallen behind on your agreed mortgage repayments, you are in arrears. This basically means you owe the lender money and need to pay it back as soon as possible to avoid further action. Act quickly to ensure you keep a roof above your head.

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What happens if you are in arrears?

If you fail to pay back what you owe on your mortgage, the lender will send letters stating that you must make a certain level of payment or you may lose your house. It’s important to read these carefully and keep the letters for your records.

Your lender may offer a repayment plan to help you clear your arrears, but this may cost you more in the long term, so always read the small print. If you do nothing, then you may be asked to attend a repossession hearing in court – this should be the last resort for you.

Remember, it’s in the lender’s best interests to help you make your repayments, so be open and honest with them.

How do I act on mortgage arrears?

To sort out your mortgage arrears, you should start by making a budget. You can do this by completing an Income and Expenditure form and getting an overview of what you have leftover at the end of every month. From this, you may be able to see what you can cut back on or where you can make money to put towards your arrears.

You can speak to PayPlan if you are in debt, and one of our advisers will be happy to tell you how to speak to creditors and ask for breathing space – a 30-day period for you to get your finances in order whilst repayments are paused.

Once you have put together a budget and sought advice, you can speak to your lender about putting a repayment plan together and getting your mortgage back on track.

When should I act on mortgage arrears?

You should try and deal with your mortgage arrears as soon as you notice you are falling behind on repayments. Don’t wait for your lender to reach out to you – try and deal with it early on to make sure you’re in a better financial position.

Should I prioritise mortgage arrears?

Sticking to your mortgage repayments should be your number one priority. It goes without saying that keeping a roof over your head is important for you and those who live with you, so make sure you prioritise your mortgage repayments and ask for help if you are struggling.

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