Arrears on Your House Mortgage

If you are lucky enough to secure a mortgage, especially if you are a first time buyer, you should be aware that you have a number of financial responsibilities that will accompany the excitement of owning your own property.

Firm control of your personal finances is now more important than ever. The danger is that you may not have needed to exercise this control if you were living at home or in rented accommodation before you moved into your new house.

Finding yourself in arrears on your mortgage means the chance of losing probably the biggest investment that you will make in your life.

If you fail to pay one or more mortgage repayments, you may have to pay interest fees on top of the ordinary mortgage repayments. The amount of these fees depends on the mortgage contract you signed with your lender.

If you know in advance that you are going to fall into arrears, you should get in touch with your mortgage lender and give them a full account of your circumstance and your plans for dealing with it.

Mortgage arrears arise for a number of reasons, from redundancy or from major illness or from bad planning of your personal finances.

Obviously, in today's recessionary times, mortgage lenders are fully aware that increasing numbers of people are facing problems repaying their mortgages and it is better that you contact them first to let them know that you will be missing a repayment.

Above all else, do not ignore the issue because your mortgage lenders definitely won't.

If you don't feel you can explain or deal with the mortgage lenders yourself, try and get someone that can help you, talk you through the options available and write letters on your behalf .

Some mortgage lenders may offer you the option to pay a smaller amount each month for a fixed period of time. The extra amount that you should have paid will be added to your total mortgage.

The mortgage lender will probably insist that you continue to pay the premiums on the life and home insurance policies associated with your mortgage.

Recently, the major lenders agreed that some homeowners will be protected from repossession under a new scheme if they can work out a deal on repayments, but this arrangement will be reviewed every six months. The banks and other mortgage lenders will expect the house holders involved to repay some money each month towards the loan.

This article is only intended as a basic general summary and you should always seek professional advice where necessary.

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