Paying off your Mortgage Arrears – If you’re behind on your monthly Mortgage Payments then you’ll need to sort these out as quick as possible, because falling behind on these payments will often lead to extra charges being incurred and applied to your Mortgage Account, meaning that the overall amount you will owe back will have increased.
There are a number of ways through which you can sort out your Mortage Arrears, however not all options may be available to you by your Mortgage Lender. So it’s best that you talk directly with them to help identify what options may apply to you. In talking to them you may have to go through an income and expenditure as well as providing information on the status of your priority bills.
Ways of paying off your Mortgage Arrears
Option 1 – Start repaying as soon as you can – Doing this will mean that it will work out cheaper in the long run, however a downside if you can call it that, is that by paying off the arrears quickly may mean that you have less money for a short period of time.
Option 2 – Make extra payments – Pay off a bit more than is actually due each month as this will start to reduce what you owe on your Mortgage Arrears. The downside here is that naturally, it’s costing you more each month, so make sure you can afford it. Also, it could be possible that your Mortgage Lender may say that you’re not offering to pay enough if that is the case pay the extra amount which you can afford and discuss further with your Lenders telling them that’s all you can afford.
Option 3 – Repayment mortgage – If acceptable by your Lender, changing to a Repayment Mortgage will in the short term reduce your monthly payments, but in the long terms it will mean your Mortgage Term will increase possible into your retirement plus overall you’ll end up paying more back.
Option 4 – Intrest only – If acceptable by your Lender, changing to an Interest only Mortgage will mean that you may be able to reduce your payments into the endowment policy or investment plan which you should be using to pay off your Mortgage at the end of the term. If you’re on an Interest only Mortgage and not paying separately into an endowment policy or investment plan then come the end of the Mortgage Term you’ll still have the total balance of the Mortage to pay off, to then own your home outright, as only paying the interest on a mortgage is exactly that – your just paying the interest.
Option 5 – Add the arrears to the total mortgage balance – Doing this will spread the arrears owed over the entire length of the mortgage, However, your monthly payments will increase as a result, as will your Mortgage total. Meaning you’ll end up paying more for your home overall. It’s unlikely that your lender will agree to this option if you have failed to keep up with agreements in the past. Or if adding the arrears to the balance of the Mortage adds up to more than the value of the Mortgaged Property.
Option 6 – Ask to delay paying your arrears for a time – If you can now afford to meet your Mortage payments, there’s no harm in asking your Mortage Lender about this option purely as a short-term fix. This would in the very short-term keep your monthly payments level, whilst you actively seek to come to and agree and long=erm solution. However, you must also remember that the arrears would be still owed and charges and interest in relation to such arrears would be increasing.