If you are having mortgage payment problems and you have found yourself in arrears, then you need to start paying back your mortgage arrears as soon as possible. Mortgage arrears will have additional charges added against them, which will increase your mortgage amount. So it is essential that you try to get them paid off as quickly as possible so you can avoid these additional charges.
As long as you can afford to pay the extra amount, it can be a good idea to pay your mortgage as well as a little bit extra to cover your mortgage arrears. Even if your mortgage lender does not think you are paying enough of the arrears, pay the extra amount and make sure that they are aware of your financial circumstances.
Some lenders may allow you to add your mortgage arrears to your current mortgage deal, this is known as ‘capitalising’. This will mean that your monthly repayments are increased because you will be paying off the arrears as well as your mortgage. Lenders are only likely to offer this option if this is your first lot of mortgage arrears and if the value of your property is more than the mortgage which is outstanding.
Most mortgages are for a 25 year period, but it could be possible to extend the term if you have a repayment mortgage and have been paying it off for a number of years. For example, if you have been paying your mortgage for 5 years and your lender agrees to extend it back to a 25-year term, you will then be paying back your mortgage for a total of 30 years.
Some lenders may be willing to delay paying arrears for a time but, whatever option you choose, it is always important that you consider your options before you agree about how to pay your mortgage arrears.
You might want to look at your finances and see where you can afford to cut back on your outgoings. If your outgoings are high because you are paying a substantial amount to unsecured debt, such as credit card or store card bills, then you might benefit from these being made more affordable to you. One Advice has access to a number of leading debt solutions, such as a debt management plan. We can offer you ethical advice about your debts and help to find one which is right for your circumstances.