Initial Mortgage Arrears

You may have just missed your first mortgage payment or are aware that you may not be able to meet your immediate future mortgage payments. This could be because of illness, unemployment, separation, divorce or due to other pressing debts. The most important step to take if this is the case is to contact your current lender by telephone and in writing and let them know that you are going to fall into arrears with your mortgage. It is also important that you give some idea of how long you think it will be and when you are able to start making your mortgage payments again and make enquiries or a suggestion as to how you will repay the arrears.

As an example Mr Client broke his leg while skiing and the doctor said he would be unable to go back to work for three months. He had no savings and due to the fact he was self employed he would have no income for the next three months. He wrote to the lender to let them know and they were highly sympathetic. The two likely ways of clearing the arrears are to either agree on an overpayment per month until the mortgage arrears are cleared or consolidate the arrears and then readjust the mortgage payments.

Lenders vary in the length of time they are willing to be patient, High Street lenders tend to be a little more patient whereas sub prime lenders can start legal proceedings with as little as two months missed mortgage payments, especially if the mortgage is at a high loan to value where the lender would be concerned that if the house is repossessed, they will not retrieve the whole mortgage balance.

There are other options that can be considered to clear the mortgage arrears such as a homeowner loan or a new mortgage. This will depend on your overall financial commitments. For more information please click on the link to the left called possible finance options. It is best to seek the advice of an independent mortgage broker for unbiased advice, including options that will not necessarily include some form of refinance.

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