You’ve missed payments or built up mortgage debts. These payments were amounts that were agreed when you first started your mortgage.
What can I do?
You need to contact your lender ASAP. They will be the ones that apply to the court for a repossession of your house. Your lender will want to help you and your situation. If your lender is having trouble contacting you, then there’s more chance they will go straight to court. Some of the options they may help you with include:
- Interest-only mortgage – You can switch to an interest-only mortgage. This means that you only pay back the interest charges instead of the capital. This will reduce your payment amount, but it is not a long-term solution as you will still need to find a way to repay the mortgage on the capital before the end of the term.
- Extend the term – Depending on your age and the amount of time left on your mortgage, your lender might be open to extending the length of your mortgage. This will stretch out your payments, meaning that your payments will reduce each month.
- Payment holiday – Your lender may allow you to have a ‘payment holiday’. This will be a few months where you’d have a break from paying. However, you will have to pay back the money missed in these holiday months and it’s possible that the lender may apply interest, so you could end up paying a larger figure over time.
- Assisted voluntary scheme – This is where your lender may offer you extra time and help if you decided to sell your property.
Government mortgage help
In some cases you can get help from the government to assist you with your mortgage repayments. There is one scheme in England and another in Scotland (Home Owner’s Support Fund) and Wales (Mortgage Rescue scheme). In England it’s called Support for Mortgage Interest (SMI).
SMI can help you with mortgage interest payments as well as interest payments on loans for improvements or repairs.
Am I eligible?
SMI can only be claimed if you receive certain other benefits. The qualifying benefits are:
- Income support
- Income-based jobseeker’s allowance
- Income-related employment and support allowance
- Pension credit
Full information is available on the Government website here.