Mortgage advice

What can I do?

If you are having difficulty paying your mortgage, there are lots of options that you may want to consider and there are many sources out there to help. Paying your mortgage should be your top financial priority as your home is at risk of being repossessed should you fail to do so. Here you will find some useful information to help at this difficult time

Further advice can be found via the Housing Loss Prevention Advice Service (HLPAS) as of 1 August 2023, individuals who received a written notice for possession will be eligible to receive free legal assistance by typing in your postcode and ticking the box ‘Housing Loss Preventions Advice Service’ please see https://find-legal-advice.justice.gov.uk/

Meeting your mortgage payments

Talk to your lender

The first thing you should do is negotiate a payment holiday or interest only payment plan with your lender and keep paying as much as you are able to. Negotiating with lenders can be complicated and stressful, especially if you are not sure what options are available, but it is important to try to come to an arrangement with your lender if you are in arrears or likely to be in arrears in the future.

If you have problems paying your mortgage, it may be possible to make changes so that the amount you have to pay each month is reduced. Your lender must agree to vary your repayments, so you may need to negotiate. You will have to make a realistic proposal that will allow you to pay off your whole mortgage eventually.

Your lender has the power to:

  • Reduce monthly payments for a certain period.
  • Cut the charges they make for being in debt with the mortgage.
  • Extend the time of the loan (this reduces the monthly payment but will be making payments over a longer period, and so you will be paying more for the home)
  • Spread repayment of the total amount owed.
  • Put off part of the repayment, allowing ‘interest only' payments for a short period.
  • Offer a better loan rate.
  • Allow time to sell the home (you must think very carefully about this as you need a home to live in.

If you would like assistance with negotiations with your landlord then the Housing Advice Team can help, if you would like to receive independent advice you can also contact the Citizen Advice Bureau. For further advice please see the information below.

Support for Mortgage Interest (SMI)

If you are claiming Universal Credit, you may be able to get help with your mortgage interest payments and interest on loans you have taken out for repairs or improvements. This type of help is often referred to as 'help with housing costs', support for mortgage interest (SMI) or income support mortgage interest (ISMI) payments. For further information on SMI please see the useful information below:

Specialist Debt Advice

You may find that, if you are in a better financial position, it may be possible to make your mortgage payments. We would recommend that you receive some specialist debt advice to maximise your income and minimise your expenditure. For specialist debt advice we would recommend that you contact the Citizen Advice Bureau or the National Debt Line.

Renting out a room

To maximise your income, you may wish to consider taking in a lodger.  However, please make sure you are aware of your responsibilities as a landlord and considering any risk issues before deciding if this is for you.  For more advice please see the information below: 

Renting out your home

You may decide that it makes more financial sense to move out of your home completely and rent it out.  As above we recommend that you are fully informed of your responsibilities as a landlord and the pros and cons of being a landlord before deciding if this is for you.  We would also recommend that you get financial advice on this to ensure that it would make financial sense.  

Avoiding repossession

You may find that none of the above options are for you, and that you are faced with possible repossession.  Here are some things that you can do to try and prevent it;

Pre-action protocol

Lenders steps before court action for mortgage arrears is known as the pre-action protocol and the steps the Financial Conduct Authority requires lenders to take before commencing court action.  

When the courts are deciding if a repossession should take place, they will take into account whether a lender has followed the pre action protocol, which includes:

The FCA Handbook, Mortgage Conduct of Business (MCOB) 13: Arrears and possessions, specifies that a regulated mortgage contract (RMC) lender must provide a customer who has fallen into arrears with the following within 15 days in writing or another durable medium:

  • full details of the missed payments,
  • any charges incurred as a result of the shortfall,
  • the total amount due and the charges that will be incurred if the shortfall is not cleared, as well as
  • a copy of the current Money Helper information sheet Problems paying your mortgage

In addition, lenders must:

  • not put pressure on a customer through excessive telephone calls or correspondence
  • not contact the borrower at an unreasonable hour (a reasonable hour will usually be between 8am and 9pm)
  • make reasonable efforts to reach an agreement with a customer over the method of repaying any payment shortfall or sale shortfall
  • allow a reasonable time for repayment of the shortfall, establishing a payment plan that is feasible given the circumstances of the customer
  • make the customer aware of any relevant government schemes to assist borrowers in payment difficulties
  • not repossess the property unless all other reasonable attempts to resolve the situation have failed
  • make the customer aware of the steps that will be taken in relation to repossession

further information can be accessed via the Shelter website.

Selling Your Home

Unfortunately, there may be occasions when someone may be better off selling their home voluntarily, rather than delaying and building up more arrears. In this circumstance, we would always recommend that you get some advice from a specialist debt advisor.

Private sale and rent back schemes

Some private companies may offer to purchase your home and rent it back to you. These schemes are best avoided and are very risky. Once you become a private tenant you have very little security should you get into difficulty with your rent and you could be served with as little as two months’ notice to leave the property. You may also find that you might not be entitled to Housing Benefit to assist you with your rent if you have had a lump sum from the sale of the property. For further information on Sale and Rent Back schemes please visit the Shelter Website.

Further Information

If you feel that you may lose your property and you have considered the advice above you should contact the Housing Advice Team by email or call the Hub on 01562 732928 (9am - 5pm Monday - Friday (10am on Wednesday)) (excluding bank holidays).

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