What can I do?

If you are having difficulty paying your mortgage, there are lots of options that you may want to consider and there is a lot of help out there. Paying your mortgage should be your top financial priority as your home is at risk of being repossessed should you fail to do so. Here you will find some useful information to help at this difficult time:

Meeting your mortgage payments

Talk to your lender

The first thing you should do is negotiate a payment holiday or interest only payment plan with your lender and keep paying as much as you are able to. Negotiating with lenders can be complicated and stressful, especially if you are not sure what options are available, but it is important to try to come to an arrangement with your lender if you are in arrears or likely to be in arrears in the future.

If you have problems paying your mortgage, it may be possible to make changes so that the amount you have to pay each month is reduced. Your lender must agree to vary your repayments, so you may need to negotiate. You will have to make a realistic proposal that will allow you to pay off your whole mortgage eventually.

Your lender has the power to:

  • Reduce monthly payments for a certain period.
  • Cut the charges they make for being in debt with the mortgage.
  • Extend the time of the loan (this reduces the monthly payment but will be making payments over a longer period, and so you will be paying more for the home)
  • Spread repayment of the total amount owed.
  • Put off part of the repayment, allowing ‘interest only' payments for a short period.
  • Offer a better loan rate.
  • Allow time to sell the home (you must think very carefully about this as you need a home to live in – please contact the Housing Advice Department if you are considering this option)

If you would like assistance with negotiations with your landlord then the Housing Advice Team can help, If you would like to receive independent advice you can also contact the Citizen Advice Bureau. For further advice please see the information below.

Support for Mortgage Interest (SMI)

If you are claiming certain benefits (Income Support, Income based Jobseeker's Allowance, income related employment and Support Allowance), you may be able to get help with your mortgage interest payments and interest on loans you have taken out for repairs or improvements. This type of help is often referred to as 'help with housing costs', support for mortgage interest (SMI) or income support mortgage interest (ISMI) payments. For further information on SMI please see the useful information below:

Specialist Debt Advice

You may find that, if you are in a better financial position, it may be possible to make your mortgage payments. We would recommend that you receive some specialist debt advice to maximise your income and minimise your expenditure. For specialist debt advice we would recommend that you contact the Citizen Advice Bureau or the National Debt Line.

Renting out a room

To maximise your income, you may wish to consider taking in a lodger.  However, please make sure you are aware of your responsibilities as a landlord and considering any risk issues before deciding if this is for you.  For more advice please see the information below: 

Renting out your home

You may decide that it makes more financial sense to move out of your home completely and rent it out.  As above we recommend that you are fully informed of your responsibilities as a landlord and the pros and cons of being a landlord before deciding if this is for you.  We would also recommend that you get financial advice on this to ensure that it would make financial sense.  For more information on becoming a landlord please visit Letting Your Property & Deposits Page.

Avoiding repossession

You may find that none of the above options are for you, and that you are faced with possible repossession.  Here are some things that you can do to try and prevent it;

Negotiate with Lender

We would recommend that you always ask your lender for extra time to try to sort out your situation. The lender may be able to delay the repossession of your home whilst you receive advice. If you need assistance then please contact the Housing Advice Team.

Pre-action protocol

Since 19 November 2008, lenders must take certain steps when borrowers fall into mortgage arrears.  Repossession should be seen as a last resort.  These steps are known as the Pre-Action Protocol.

When the courts are deciding if a repossession should take place, they will take into account whether a lender has followed the pre action protocol, which includes steps such as;

  • Has the lender provided you with information about the total amount of arrears, the outstanding balance on the mortgage, and details of any interest or charges that may be payable.
  • Has the lender taken steps to discuss the reason you're in arrears.
  • Has the lender recommended that you contact your local Council for advice.
  • Has the lender considered changing the date or method of payment.
  • Has the lender discussed any proposals you make for repayment of the arrears, giving reasons in writing within 10 days if your proposals are not accepted, and allowing you reasonable time to consider any proposal they make to you.
  • Has the lender given you 15 working days notice in writing of their intention to issue a claim for possession, if you don't keep any agreement you make.

If you have to attend court to prevent your home being repossessed Worcester Housing & Benefit Advice Centre can provide a representative to go to court with you.  The representative will ask you these questions, so it may be helpful for you to keep notes should the need arise. Please contact Worcester Housing & Benefit Advice Centre for representation at court or contact the Housing Advice Team for assistance. For further advice visit the Shelter Website.

Court desk scheme

Court desk schemes or 'duty advice desks' provide homeowners facing repossession with free legal advice and representation at court before a hearing. This advice is available to all, and is not means tested. You should always take advantage of this service if it is offered and you have not already sought advice about your case. Court desks have been able to prevent immediate repossession in up to 85 per cent of cases. There is a court desk representation at Worcester County Court, and we would recommend you seek advice before the day of your hearing.

Selling Your Home

Unfortunately there may be occasions when someone may be better off selling their home voluntarily, rather than delaying and building up more arrears.  In this circumstance, we would always recommend that you get some advice from a specialist debt advisor.

Mortgage rescue

Mortgage rescue is a national Government backed scheme that enables Registered Social Landlords (Housing Associations) to purchase your home and rent it back to you as an assured tenant.  An assured tenancy affords a lot more security than a private tenancy and you can remain there indefinitely as long as you abide by the conditions of the tenancy. For more advice on Mortgage Rescue please see the information below:

Private sale and rent back schemes

Some private companies may offer to purchase your home and rent it back to you.  These schemes are best avoided and are very risky.  Once you become a private tenant you have very little security should you get into difficulty with your rent and you could be served with as little as two months notice to leave the property.  You may also find that you might not be entitled to Housing Benefit to assist you with your rent if you have had a lump sum from the sale of the property.  For further information on Sale and Rent Back schemes please visit the Shelter Website.

 Further Information

If you feel that you may lose your property and you have considered the advice above you should contact the Housing Advice Team.