Guide to mortgage arrears
Your lender will get in touch to ask you to bring your account up to date as soon as possible. If you continue to miss repayments, the mortgage lender ultimately has the right to repossess your house, although that is the worst-case scenario.
The majority of those who fall into arrears on their mortgage do not end up losing their homes. But don’t let things get to this stage. Contact your lender as soon as you foresee any problems with making your mortgage repayments. They are unlikely to want to repossess your property as this takes a lot of time and resources. In addition, since the lender will want to sell quickly, they might not get a reasonable price for the property. and in the current market they may struggle to sell it at all.
How will a bad credit record affect my mortgage?
If you fall into arrears on your mortgage, it will appear on your credit record and if you apply for another mortgage (or any other form of credit) in future, the lender will see this on your file. Speak to your lender as soon as you experience any financial problems that could affect your ability to make your monthly repayments.
You may be able to come to a compromise until your finances are back on track. This could include making reduced payments, temporarily switching to an interest-only loan or extending your mortgage term to reduce your monthly repayments. But remember, any arrangement will almost certainly be a temporary measure and you will have to repay the full amount borrowed at some point.