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What to do if you're struggling with the mortgage

Thursday, 11 August 2011 11:46 AM

The Citizens Advice Bureau (CAB) has today issued a series of recommendations for homeowners who are struggling to keep up mortgage repayments.

The advice has been issued to coincide with the release, expected later today, of figures detailing the current level of home repossessions.

The CAB said that mortgage companies and the Government should do more to help people avoid property repossession.

The charity said it had helped deal with more than 100,000 mortgage and secured loan arrears, and stopped 5,000 people becoming homeless over the past 12 months.

Gillian Guy, chief executive, said: “With the cost of living going up daily and incomes lagging badly behind, mortgage lenders and the Government must focus on helping people stay in their homes. Repossession is a terrifying prospect and should always be the last resort.”

She reminded anyone struggling to meet their mortgage repayments that they can get free, independent advice from their local CAB.

“You have a greater chance of staying in your home if you seek advice and take action as soon as you think you’re having problems,” she added.

Tips for those that fall behind with mortgage repayments:
 

  1. Repayments should be your first priority each month in order to avoid losing your home.
  2. Contact your lender if you are struggling to keep up with mortgage repayments. Don't just bury your head in the sand. Your mortgage lender may be able to help and should be willing to help change your repayment plan. If they can see that you are doing your best to prevent debts mounting up they are more likely to help.
  3. Get some unbiased advice, free of charge, the moment that it becomes apparent that you have a problem rather than waiting for the threat of court action before you act. Shelter (0808 800 4444), CAB (England 08444 111 444, Wales 0844 477 2020) and the National Debtline (0808 808 4000) should be the first calls you make.
  4. You could change the monthly cost of your mortgage. Lenders may be willing to extend your payment period in exchange for a lower monthly interest payment. What about interest-only payments for a bit?
  5. Check your insurance for mortgage payment protection if you have been made redundant, are ill or have been involved in an accident.
  6. Seek advice on benefits, tax credits and other help to which you may be entitled.
  7. Don't ignore court hearings. Going to court can help, but get advice first. Even at this late stage it could help save your home.
  8. Ask if you are entitled to, and qualify for, the Government’s mortgage rescue scheme. It may help you sell your house but still live in it as a tenant. Ask your local council about this and also about what other benefits you are entitled to if you have lost your job.

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