Month: September 2023

The number of people we help with mortgage arrears has steadily risen over the last year, due to the cost of living crisis and significant increases in the Bank of England Base Rate. Many people with a mortgage who come to us already have a negative budget - others have very little left at the end of the month, and a rise in their repayments would put them into debt.

First steps

• If you are struggling to pay your mortgage or secured loan, and you haven’t already done so, get some advice as soon as possible. It is important to look at your whole situation, as you may have other debts that need dealing with as well as your mortgage. Get in touch with Maldon & District Citizens Advice.
• It is never too early or too late to contact your lender and find out what options may be available to you.
• Pay as much as you can. Even if you have not paid for a while, or cannot afford the full amount each month, you should start paying as much as you can afford.

Most lenders are regulated by the Financial Conduct Authority (FCA). Their rules say that a lender must ‘deal fairly with any customer who is in arrears’.

The Mortgage Charter

Most UK mortgage lenders have signed up to the Mortgage Charter. If your lender has signed up to the charter, they should offer you a wide range of support if you are worried about meeting your mortgage payments because of increased interest rates, or are already struggling to make payments.

• For example, if you are up to date with your payments, your lender should allow you to switch to interest-only payments for six months, or extend your mortgage term to reduce your monthly payments. They should also give you the option to revert back to your original term within six months. You should not need an affordability check and this support should not affect your credit score.
• From 26 June 2023, you should not be forced to leave your home
  within twelve months of your first missed mortgage payment unless you agree to do so or there are exceptional circumstances.
• From 10 July 2023, you should be allowed to lock into a deal up to six months before your existing fixed-rate deal changes. You should also be able to manage your new deal and request a better like-for-like deal from your lender up until your new term starts, if one is available.

Help with mortgage payments

If you need help with your mortgage and you are claiming certain benefits, you may be able to apply for a Support for Mortgage Interest (SMI) loan. SMI helps people who qualify with payments towards the interest payments on their mortgage.

Don't be tempted to take out another sort of loan to repay your mortgage arrears. Often these are very expensive, and could put your home at greater risk.

Increasing your income

It is very important to make sure that you are getting all of the benefits and extra help you might be entitled to. Citizens Advice can help you check this or you can use an online calculator such as turn2us

If you have mortgage payment protection insurance, check to see if you can make a claim.

While we cannot provide “financial advice” we can help with your arrears or potential shortfall. We look forward to hearing from you about this or any other issue, in whichever way suits you best.

• Visit www.maldoncitizensadvice.org.uk and submit an enquiry.
• Phone 01621 875774 and leave a message. An adviser will return your call.
• Drop in, no appointment necessary, to:
* Heybridge: Tuesdays 9.30am-1pm Fullbridge Church, 27 Fullbridge CM9 4LE * Southminster: Tuesdays 9.30am-12 noon URC North Street CM0 7DF
* Burnham: Thursdays 10am-1pm Baptist Church Hall, Station Road, CM0 6HJ