Mortgage Arrears Definition
Have you heard of the term Mortgage Arrears? Generally it means that a home owner is not up to date with their mortgage and in breach of their repayment agreement with their lender. This is potentially a very serious situation and can lead to the home owner and their family being subject to mortgage arrears repossession and put out on the street by their lender or mortgage holder.
Mortgage Arrears Causes
No-one usually forgets to make their mortgage repayment, if your mortgage is in arrears it will usually be on account of a family emergency, medical bills, business down turn, job loss or a rude increase in interest rates. The increase in interest rates, food, petrol, electricity and gas prices has hit families particularly hard and making mortgage arrears a problem for many.
Mortgage Arrears Resolution Process
Your options to resolve your mortgage arrears all revolve around speaking to your lender as early as possible, so that a solution can be worked out before things get out of hand. Your lender will not be happy about you slipping into arrears, but they will give you credit for being upfront and make an effort to keep you a happy customer, while protecting themselves and their shareholders. They may suggest many things from a double payment in the future, extending your loan period, debt consolidation, extra payments for a period to get you back in line or a new loan. Whatever they suggest it will be time sensitive, so you will need to be prepared to act immediately. Have your taxes up to date, keep your pay slips, have a list of your current monthly expenses such as telephone, electricity, gas, rates ready and be honest with yourself about how much you spend on food and entertainment. It may even be worthwhile visiting a financial budgeting firm like My Budget for some advocacy. If your arrears is over two months, there is still hope, but dialogue must be started with your lender. Stop ignoring their letters and seek mediation or consultation.