Has the pandemic caused you to miss mortgage payments? Don’t panic.

Furlough and redundancies have contributed to significant reductions in incomes across the last year, so what if you’re struggling to make payments on your mortgage as a result?

Getting into arrears on your mortgage can be a scary prospect, but don’t panic, realistically lenders can’t pursue repossession unless all other reasonable attempts to resolve the situation have failed.

So what are your options if you’ve missed a mortgage payment, or know an upcoming payment will be challenging to meet?

Talk to your mortgage advisor

I can help discussions with your lender who will be keen to help and ensure they can support you to continue making payments. Your options could include:

• Take a payment holiday

  This means taking a break from a mortgage payment for a few months. Not all lenders offer this, and usually you will have had to have made an overpayment on your mortgage to qualify. You will have to repay these mortgage payments at a later date.

• Increase your mortgage term

  Your lender may be willing to increase the mortgage term to accommodate lower monthly payments. It is important to note that extending your term will result in more interest needing to be repaid.

• Switch to just paying the interest on your mortgage

  If you’re on a repayment mortgage you may be able to switch to an interest-only mortgage. This will reduce your monthly payment as you’ll only be paying the interest on the mortgage, rather than the interest and the capital. Switching to interest-only can be a good short-term solution but you’d need to make sure you can repay the capital (the original amount borrowed) at some point before the end of the term.

• Put a plan in place to enable you to clear your mortgage arrears

  Lenders will often offer you the ability to make up the missed payment, this could be including a repayment of some of the missed mortgage payment being added to your future monthly mortgage repayments, until the outstanding amount is repaid. Lenders usually give 12-24 months to clear arrears.

It is important not to ignore missed payments, and to speak with us as soon as possible to tackle the situation head on. Being proactive will help alleviate any stress associated with the situation too.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.