Mortgage Arrears : Why It's Important To Take Action
More and more people are getting into difficulties meeting their mortgage payments, and are falling into arrears. Whether it's because of unemployment, reduced income, or rising costs of other debt, getting behind on your mortgage is a serious problem that could eventually lead to you losing your home through repossession.
Mortgage arrears don't have to lead to the loss of your home though - it's not an automatic and inevitable process. Mortgage lenders have many options available to help you solve your problem, and contrary to widespread belief, repossession is not an attractive option for a lender. It's a long and expensive process which doesn't necessarily end up repaying the debt - especially in these times of falling house prices, where a sale at auction may not cover the amount owed.
There's no doubt though that a lender will definitely start repossession proceedings if there's no other alternative, but the actions you take can minimise this risk.
Talk to Your Lender
It's vital that you talk to your lender as soon as you get into arrears, or as soon as you realise this is going to happen. By getting in touch with your mortgage company you're showing that you're making an attempt to deal with the situation, and not just burying your head in the sand. This will likely lead to a more sympathetic attitude from your lender, and make repossession proceedings less immediately likely.
You'll need, however, to come up with some proposal on how you're going to confront the issue, such as raising new income or cutting costs, or by asking for the terms of your mortgage to be renegotiated to make it more affordable.
Get Debt Advice
Debt advisors such as Citizens Advice or National Debtline can offer free help and advice, and may even be able to negotiate with your lender on your behalf.
Pay What You Can
Even if you can't afford to make your mortgage payments in full, you should always pay what you can. Not only will this keep the arrears from growing out of control, it also again shows that you're trying to keep on top of things. Mortgage lenders are more likely to concentrate their recovery efforts on debtors who show no intention of making repayments.
Facing up to debt problems is hard to do, but it's absolutely vital that you deal with mortgage arrears as soon as they arise, as repossession can only be avoided by taking positive action.
© 2008 Debt Sorter
