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Mortgage arrears are a common cause of concern for those facing financial distress. If you’ve fallen behind with mortgage payments, ultimately you could risk losing your home. You need to act quickly, regardless of whether it’s your first missed payment or you’ve missed several. If you don’t, your lender could take drastic action against you as you have failed in your contractual obligation to make your payments on time.
When we provide debt help to individuals across Scotland that are suffering with personal debts, the biggest cause for concern, and questions we are asked, revolve around whether they could lose their home. With the majority of unsecured debts, this is very unlikely but with mortgage arrears (mortgages are secured debts) repossession can be a real threat and your lender can begun court action quickly.
Needless to say, nobody wants to become homeless through failing to keep up with mortgage or rent payments but that is a real possibility if the issue persists. If you’re having difficulty paying your mortgage for specific reasons such as losing your job or you/your partner going on maternity leave, for example, it’s important that you talk to your lender as soon as possible and make them aware of your changing circumstances. Some lenders may give you a three-month ‘break’ from mortgage payments or move you onto an interest only mortgage for a short time until you’re back on your financial feet again.
If the matter is beyond repair and no agreement can be made with your lender, you will need to find a way of stopping your arrears from rising while keeping up with your future payments. That means cutting down any other expenditure and prioritising your mortgage payments above all else.
There are also two potential avenues to explore, depending on whether you qualify:
1. Mortgage to Shared Equity
This Scottish Government scheme allows homeowners who can no longer afford their mortgages, and have at least 25 per cent equity in their property, to reduce their level of secured debt while retaining a stake in the home.
2. Mortgage to Rent Scheme
This scheme is run by the Scottish Government. It involves the property being purchased by a local council or a housing association but you then continuing to live there as a tenant.
What’s important to recognise is your mortgage lender cannot automatically repossess your home, they must follow certain repossession procedures. You still have time to take the right steps; contact Scotland Debt Solutions for free, confidential advice today.
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If you would prefer a meeting in the comfort of your own home, we are happy to arrange a date and time convenient for you no matter where in the country you are based.
Our personalised debt report will help you better understand your financial position and see where your money is going.
Arrange a call with an expert advisor at a time to suit you or contact our team via WhatsApp for immediate help and advice.
We have offices in Aberdeen, Dundee, Edinburgh, Glasgow & Inverness. Contact your local office now, for your initial consultation and advice.
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Our Insolvency Practitioners are regulated by ICAS or the IPA and our firm is authorised and regulated by the Financial Conduct Authority
Fees and Information: There are fees associated with our services. These will be fully explained before entering into any of the personal debt solutions referred to on this website. Full details of our fees and how these are charged are fully explained to you prior to you committing to any particular service.