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What should I do if I can't pay my mortgage?

If you find yourself in a position where you can't meet your monthly mortgage payments, it is important not to bury your head in the sand. Help is at hand and there are things you can do to get back on track.

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If you're struggling financially and think you won't be able to make your mortgage payments you should take steps to deal with the situation immediately, ideally before you actually miss a payment.

Contact your mortgage provider

Contacting your mortgage provider is vital of you want to avoid losing your home. Most mortgage lenders are more than willing to work with you to reach an agreement.

Contact your lender as soon as you know you will have trouble meeting a repayment. In most cases they will be able to help you cope by:

Your lender should work with you to find a way to ensure that you do not lose your home:

  • They may agree to extend the term of your loan, bringing down your monthly payments

  • They may also agree to accept smaller payments in the short term

  • It may be possible to stop making payments for a while, known as a mortgage payment holiday. Be aware that any unpaid payments will be added to your overall debt.

What if I've already missed a repayment?

If you've already missed a repayment, your mortgage provider will notice and chase it up right away. Bur do not ignore their calls.

Although a missed payment will likely hurt your credit score, your lender will make efforts to reach an agreement to help you during this period.

In fact, lenders cannot seek repossession unless they've made reasonable attempts to resolve the situation. Even if those attempts fail, you'll be given notice before that take any action.

Get free debt advice

Many people who are struggling financially, often don't get the help they need because they don't know it's out there.

Debt charities help people get out of debt by offering free and impartial advice and also work with you and your creditors to come to an agreement. There are a number of independently-based debt charity such as:

As well as helping you to draw up a budget so that you can figure out how to meet your mortgage payments, they will give you advice on how to talk to your lender about your repayments.

Are there any government schemes that can help?

If you are having serious problems paying your mortgage and are in real danger of losing your home, there is a government scheme that may help you.

The Support for Mortgage Interest (SMI) scheme provides help with mortgage interest payments to some people on the following state benefits:

  • Income Support

  • Pension Credit

  • Income-based Jobseeker's Allowance

  • Income-related Employment and Support Allowance

The scheme can help you with interest payments on your mortgage or loans you have taken out for home improvements. The benefit is paid directly to your mortgage lender and only covers the interest rather than repaying the capital.

To find out if you are eligible for the scheme and to make a claim, contact Jobcentre Plus or the Pension Service.

GOV.UK's guide to Support for Mortgage Interest

The Scottish Government's Homeowners' Support Fund website

Mortgage support in Scotland

In Scotland, you can apply for the Homeowners' Support Fund (HOSF) if you are struggling to meet your repayments.

If you're struggling financially, here are some steps you can take to get back on track:

1. Draw up a realistic budget

It is vital that you look at your finances and draw up a budget that you will be able to stick to.

Start by looking at your statements and listing all your outgoings and income. This should help you identify areas in which you could rein in your spending and put that spare cash towards meeting your mortgage repayments.

How to write a budget

2. Prioritise your debts

If your mortgage is your only debt then you can concentrate on this by putting as much spare money as possible towards meeting repayments.

You could even put your mortgage repayments at the top of your list even if you have other debts like:

  • Credit cards

  • Loans

  • An overdraft

While other debts can be intimidating, it is more important that you have a roof over your head. Put your mortgage at the top of your list but make sure you are doing everything you can to meet the demands of your other debts as well.

What to do if you cannot pay a bill

3. Continue to pay

If possible, try to at least keep up a minimum level of repayment - even if it is not quite the level originally agreed with your lender.

Discuss this with your lender first, so they know how much you can pay and are aware that you are having difficulty meeting your payments.

This shows your lender that you are at least trying to meet repayments and have good intentions, which may make them behave more leniently towards you.

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