What to do
Your most important asset is YOUR HOME and you should deal with mortgage issues immediately.
When you have money problems, you should contact your lender very quickly. You can also contact Housing Options at East Cambridgeshire District Council, who are able to deal with these issues and can talk to your mortgage lender on your behalf. Officers will be able to advise you of your rights and be the authorised person to negotiate an affordable payment plan with your lender in certain circumstances. They can also attend court with you if you have a possession hearing.
Most lenders are committed to helping homeowners who are struggling.
If your lender does not hear from you or does not know why you have not made a payment, they are more likely to start legal action for repossession of your home.
Some options to think about
There are a number of ways we can help you go through this difficult situation.
Maximising your income
The Housing Options Officer will help by checking you are claiming all of the welfare benefits you are entitled to.
You can also negotiate with your mortgage lender to reduce your payments to non-priority creditors in order to free up income to pay your mortgage.
We can help you look at options to increase your income and reduce your expenditure.
Clearing your mortgage arrears by prioritising your debts
The Housing Options Officer will look at basic income and expenditure statement and use this to negotiate an affordable payment plan with your lender.
Interest Only Mortgage
If you are unemployed and can change your mortgage to an interest only mortgage.
Mortgage Payment Holidays
A mortgage payment holiday is an agreement you can make with your lender that allows you to temporarily stop or reduce your monthly mortgage repayments.
This is only a temporary solution and interest for the period of non-payment may be added to the mortgage balance.
The Housing Options Officer will check with your lender if you are eligible to take a payment holiday and for how long.
Extending the Term of the Loan
You can ask your mortgage lender to increase the term of the loan, for example from 20 to 25 years. This could reduce your monthly payment which may free up some extra income to clear the arrears. However, it is not advisable to extend the term of the loan beyond the date you retire, because your income is likely to go down at retirement age. This will depend on the lender and you will need to check with your lender to see if this option is viable.
Capitalising the Arrears
You can ask your lender to add your arrears to the mortgage. This will increase the monthly payment but will clear the arrears. This option will only be possible if you have equity in your property.
It may be possible to re-finance with another lender who may be able to offer a better rate of interest. Always get advice from an independent financial adviser first.
Approaching a Housing Association to buy your property (Mortgage to Rent Product)
This works by an appointed Housing Association buying back your property at 90% of the market value. They will then rent it to you at an affordable rent, and you will become an Assured Short hold Tenant.
Downsizing by Selling Your Home
If you have equity in your property it may be an option to sell your home and buy a smaller/cheaper property. You may decide to privately rent instead.
Community Advice Service
01353 66 55 55
CAS is a free, confidential source of advice and information, for people with employment, consumer issues, money, benefits, settled status and other concerns.
0808 800 4444
Free housing advice helpline
The Money Advice Service
0300 500 5000
You can contact them from Monday to Friday from 8:00am to 8:00pm and Saturday from 9:00am to 1:00pm
National Debt line
0808 808 4000
The line is available on Monday to Friday 9:00am - 9:00pm. Saturday 9:30am-1:00pm
This service offers practical advice on dealing with debt including self-help packs, sample letters to creditors and personal budget sheets.
Step change Debt Charity
0800 138 1111
Monday to Friday (8:00am to 8:00pm) Saturday (8:00 am to 4:00pm)
StepChange Debt Charity is a registered charity offering free, confidential advice and support to anyone who is worried about debt.
There is also an online Debt Remedy tool. This asks you a series of questions about your household, income and expenditure and then provides you with a Debt Remedy tailored to your personal circumstances.
Financial Ombudsman Service
0300 123 9 123 or 0800 023 4567
If you have a complaint that you cannot resolve with your lender, the Financial Ombudsman Service may be able to help.
We want to listen, we want to help
Telephone: 01353 665555
Emergency out of hours: 07710978900