If you are having problems paying your mortgage – don’t panic.
Lenders must wait twelve months from the time the first mortgage arrears arise before they can apply to begin repossession proceedings – butdon’t leave it that long before you do something about it .
Don’t ignore letters or phone calls from your mortgage lender . They are obliged under the Code of Conduct on Mortgage Arrears to keep in contact with you and to make every reasonable effort to agree an alternative repayment schedule with you before seeking repossession of the family home.
If you are in mortgage arrears, or are struggling to continue paying your monthly repayments – you should contact your mortgage lender as soon as possible to let them know why.
It is best to make contact in writing – and keep a copy of what you send.
Work out down your household budget showing your income and spending – this will show what you can realistically afford to repay. You might try to cut down on any non essential “extras” .
Don’t stop paying altogether – pay what you can afford taking into account the overall cost of running your household – food , fuel , clothes etc. Make a genuine and reasonable offer and don’t agree to try to pay more.
If you have been made redundant, check whether you have any Mortgage Payment Protection Insurance.
Claim Mortgage Interest Supplement – from your local HSE welfare office.
Your lender may suggest alternative repayment options to you – with lower monthly amounts.
For example : Paying “interest only” for a period of time or extending the term of your mortgage to reduce the cost of monthly repayments.
Make sure any new repayment plan agreed with your lender is put in writing. .
If your case does go to court – you may well be liable for the court costs too It will help your case if you can show that you are making a genuine effort to repay the debt. You should seek independent legal advice in such cases. You may be entitled to free legal aid .
Unfortunately, there are some situations where people will just not be able to meet their mortgage repayments in the long term.
If this is the case – you must seriously consider your options. Independent legal advice from your solicitor and/or free advice from MABS is recommended.
If you are tempted to “hand back the keys” remember that you will remain liable for all the outstanding debt, including any accrued interest, charges, legal, selling and other related costs.