For those worrying about their mortgage payments here's some advice on how to deal with the problem.
Talk to your lender before you fall into arrears
Many people will fall into arrears with their mortgage without informing their lender that they are struggling to afford their payments. Lenders are more accommodating with borrowers who talk to them about their financial situation prior to going into arrears. Often people feel embarrassed talking to a stranger about their personal finances, but staff employed by lenders are trained in dealing with this type of problem and are usually sympathetic.
Find out all your options
When talking to your lender find out about all the options available. Maybe you could change your mortgage to interest only for a period of time, extend the mortgage term, change the payment date or even arrange a short payment 'holiday'. However, you need to be aware that any change to your mortgage terms will mean that the loan will take longer to pay off and, therefore, cost you more in the long term.
All lenders will have a code of conduct that they must adhere to in all arrears cases. Ask for a copy of this code of conduct at the outset of your discussions with the lender so you are clear of your rights.
There are a number of charities that offer free debt advice, to find out more read my article - Where to get free debt advice. Taking advantage of theses services at an early stage can provide you with invaluable advice and help you resolve your problems quicker.
Look at your overall finances
Just dealing with your mortgage in isolation from your other finances is rather narrow minded. Take time to look at all aspects of your income and outgoings and see if you can make some savings that can go towards paying your mortgage. Be tough with yourself and cut down on every expenditure possible because at times like this keeping a roof over your head is your main priority.
Only agree a repayment plan you can keep
Your lender will want you to agree a plan to get the arrears cleared over time. Make sure you agree a payment plan that you are confident you can keep up. The worse thing you can do is to agree an overgenerous plan now only to fall behind again in a few months.
If you are struggling to get your mortgage payments on track then maybe you need to consider downsizing. There are, however, some drawbacks to this course of action - if you are already in arrears then you may have a problem getting a new mortgage and there are some large costs involved with moving house, which need to be fully considered.
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