July 5, 2022

If you have a mortgage and you have fallen behind on your monthly repayments, it is essential to take immediate action to avoid having your home repossessed. By acting quickly and making arrangements with your lender, mortgage arrears can be cleared and your family may not be evicted from your home.

The Financial Services Authority (FSA) regulates most mortgages that have been taken out since 31 October 2004. The regulation encompasses almost all residential mortgages and includes rules that lenders must follow to ensure they treat borrowers fairly. This includes rules that instruct lenders to send regular statements to their customers to keep them informed of the balance of their mortgage and any arrears they may have accumulated.

Also included are rules that stipulate the actions that lenders should undertake if they wish to repossess properties on which they are the mortgagee. The rules are designed with borrowers in mind to help ensure that customers are treated fairly and banks don’t overreact when mortgagors fall into arrears.

If you have fallen into arrears on your mortgage it is important to do everything in your power to prevent repossession of your property. Despite the obvious consequence of losing your home, repossession can have lasting effects such as significantly lowering your credit rating and therefore your ability to obtain finance in the future.

If you have accrued mortgage arrears and wish to pay them off, you should first contact your lender. Together you can calculate how much you should be able to pay off the mortgage arrears each month while continuing to make your normal monthly repayments. Your lender can help you with this, however, if you would like to evaluate it yourself, the FSA has on online budget calculator on their website. https://mortgageprotectionreviews.com/mortgage-protection-insurance-leads/

When calculating your monthly budget you should think about what expenses you may be able to reduce and whether you are entitled to any other forms of income that you may not have considered before. This may include payouts from insurance policies such as mortgage protection insurance, and State benefits such as the Working Tax Credit and the Child Tax Credit. Increasing your monthly income by even a small amount can help with clearing your mortgage arrears as quickly as possible.

If your lender is unhelpful, or if you need any further advice, consider contacting one of the free advice centers such as the Citizens Advice Bureau or the National Debtline. Both institutions offer free consultation services to members of the public who require help with financial problems such as mortgage arrears.

Regardless of the path you take to clear your mortgage arrears, act fast in order to avoid repossession and eviction. Having your home repossessed will not only be a harrowing ordeal at the time of repossession but it will have lasting effects on you and your dependents. Your credit score, for example, can become heavily impaired and severely limit your ability to obtain credit during the next six years. It can therefore take many years to rebuild your lifestyle after home repossession occurs.

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