What happens if I don’t keep up with mortgage repayments?

November 5, 2019

Your mortgage is a priority debt and should be paid ahead of other liabilities, as failing to do so has serious consequences. If you don’t keep up with mortgage repayments the lender can repossess the property as you’re not meeting the contractual terms of the loan.

Mortgage lenders do have other options open to them, however, and are unlikely to take such drastic action without careful consideration. Initially, they’ll expect you to contact them as soon as you know you won’t be able to make a payment, and also to be open about your circumstances.

Mortgage arrears – what can lenders do?

Mortgage providers are obliged to act responsibly and fairly when their customers experience difficulty in repaying, and could offer a number of solutions depending on your circumstances and the type of mortgage you hold.

These might include:

  • Negotiating a plan to repay your arrears alongside the current payments
  • Granting a ‘payment holiday’ if you’ve not yet gone into arrears but know you won’t be able to make the next repayment
  • Extending the term of your mortgage so payments are reduced
  • Paying only the interest element for a period of time if you have a capital and interest mortgage
  • Capitalising your arrears so they’re added to the mortgage sum as a whole

What if your lender wants to repossess your home?

If your lender wants to begin repossession proceedings, they must follow a process called the Pre-action Protocol for Possession Proceedings, which is a system that helps to protect you from unreasonable behaviour by the lender.

Essentially, the court will want to verify that the lender has made themselves aware of your financial circumstances, has discussed the reasons for the arrears, and considered how they might be repaid without having to repossess the property.

What can you do about mortgage arrears?

  • If you have mortgage payment protection insurance you may be able to make a claim on the policy
  • You could be eligible to claim Support for Mortgage Interest (SMI), which would pay the interest on your mortgage for a defined time period
  • Continue to attempt negotiations with the lender regardless of the stage of legal action
  • Seek professional help

Northern Ireland Debt Solutions help people in Northern Ireland to escape debt. We’ll provide reliable advice on what to do next, and ensure you understand all your options. Please contact one of our licensed insolvency practitioners to arrange a free same-day meeting.

Lawrence O'Hara

Insolvency Adviser

Tel: 028 2132 6269

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