Mortgage arrears result from your inability to pay you mortgage on time. If you are not able to pay your mortgage on time then you can be in danger of losing your property as the lender may take legal recourse to recover his mortgage losses and arrears. The first step in this situation should therefore be to opt for debt counselling and advice as soon as you see signs of financial difficulty.
Here are 5 ways in which you can avoid mortgage arrears and save your house from repossession.
Independent Debt Advice and Mortgage Counselling
Taking independent debt advice and mortgage counselling as soon as you see signs of financial difficulty can prove very useful. The counsellor can advice you on different ways you can save money and make more money. This way you can come up with a detailed and step by step plan to avoid repossession.
Lower Mortgage Interest Rate
You can opt for remortgage at a lower interest rate. If you have your mortgage at a standard variable rate (SVR), you can go for a fixed mortgage rate which will be lower than SVR. This will help you save hundreds of pounds and this can prove the difference between being able to afford your mortgage payments or accumulating arrears.
Get Your Mortgage Term Extended
Getting your mortgage term extended will result in your paying more interest, but it will also help in reducing your monthly payment amount. This will help you in being able to afford your monthly payment by spreading your mortgage cost over a longer period of time.
Interest Only Mortgage
You can discuss your problem with your lender and opt for an interest only mortgage plan. This will help in reducing your monthly payment amount and will make your mortgage payment more affordable.
Mortgage Insurance You can save your self from mortgage arrears by opting for a mortgage insurance plan that is comprehensive and affordable. This will help you to make your monthly payments in case of an accident, health problems or job loss.
However, you should be very careful while choosing such an insurance policy. Go through the terms and conditions of the policy that you intend to buy very carefully to ensure that you are not left stranded in your hour of need as many insurance providers have lot of loopholes in the terms and conditions of their insurance plans so as to avoid having to make payments.
By Robert Charlson