Missing a mortgage payment advice

PJB9000

Hi,

I wonder if anybody could help me please.

I've had my mortgage with First Active since March 08, although I've had the mortgage for many years - I choose to switch when I can without penalty.

For the first time ever I'm going to struggle to make a payment this month. I don't want to borrow from family and I'm unable to extend my overdraft. I am in a position to pay something (mine is a repayment mortgage) and was thinking of contacting First Active to offer to pay the interest only this month, or possibly an agreed amount with them. I at lesst want to show First Active that I want to pay something, even if it isn't my full payment.

It's typical that in November I will be more than able to make the payment, as my wife will be receiving 8 months arrears from a promotion, I will have a lot of overtime coming my way and if my Union gets its backside into gear, there's a possibility of 8 months pay award arrears coming mine and my wife's way as well. But none of that helps with this months payment!

I just wonder what First Active are likely to say, whether I'd get penalised financially, but, more importantly that that, what would happen re our credit rating?

Any advice anybody can give would be much appreciated.

I fully intend discussing the situation with First Active, but wanted to sound out some advice on here beforehand, particularly on what I should say to First Active.

Cheers!

SouthCoast

Advice from CAB on mortgage arrears:

http://www.adviceguide.org.uk/index/life/debt/mortgage_arrears.htm

feisty1

Only First Active are going to be able to tell u that & i am saying that in the kindest way possible. Lenders are required to treat clients fairly and sympathetically & each case will be treated on an individual basis. The most important thing is if yr absolutely sure yr going to struggle to make repayments next month contact FA asap & explain yr situation. I have had clients in this situation where it has been logged on their credit file & others who haven't. Also have ready an explanation of how u r going to be able to meet future payments as this may be a concern for them However if u can demonstrate this is a "one off" it may favour you.
Once u have spoken with them why don't u post the outcome back here as it may be helping others As believe we you wont be alone, altho it may feel like it. Good luck and well done to facing up to it and not burying yr head in the sand

I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

opinions4u

Call them. Talk to them. Agree something. This should protect your credit rating.

Key word of advice if you don't agree something: pay something. That way you will be less than a month in arrears! Even if it's only a quid.

getmore4less

If they are not going to be happy with a reduced payment or will mark your card since you are going to be able to pay most of it any way(the interest) and know there is a load of money coming in a months time can't you adjust your cash flow with some normal spends on a credit card.

For short term borrowing paid off in full as soon as the funds come in it would not cost that much.

A 0% purchase CC might be a good option to reduce your OD anyway

Rick62

Call them and see if they will give you a month holiday or at least put on interest only.

DO NOT MISS YOUR PAYMENT - your credit rating will be trashed. One late payment on a credit card even and many lenders will reject you outright for a new mortgage. Even light subpime mortgages are now about 8% interest rate. Lenders are being tighter on credit than ever before.

PJB9000

Many thanks to all of you for taking the time to respond, I very much appreciate it.

This morning I received my MBNA credit card statement, and with it were a couple of blank cheques. Having read what's on the bumf that came with them, it appears that I can pay one of these cheques into my account, for a 3.5% fee, but I'll be charged 0% APR until September 2009.

So as far as I can see, I can write myself a cheque for £500 and pay it back next month in full, all for a £17.50 premium.

I think this is the way I'm going to go. I'll gladly pay £17.50 if it means a clean credit record, not to mention the weight it will lift off my shoulders.

Once again thanks to you all, you've been a big help. :T

opinions4u

PJB9000 wrote: »

Many thanks to all of you for taking the time to respond, I very much appreciate it.

This morning I received my MBNA credit card statement, and with it were a couple of blank cheques. Having read what's on the bumf that came with them, it appears that I can pay one of these cheques into my account, for a 3.5% fee, but I'll be charged 0% APR until September 2009.

So as far as I can see, I can write myself a cheque for £500 and pay it back next month in full, all for a £17.50 premium.

I think this is the way I'm going to go. I'll gladly pay £17.50 if it means a clean credit record, not to mention the weight it will lift off my shoulders.

Once again thanks to you all, you've been a big help. :T

3.5% repaid in a month would be a 40%+APR. Repaid over a year would be just short of 7% APR assuming no interest is charged.

How much would you be charged to take cash out of an ATM? Cash advance fee may be 1% lower. Call them on their 0800 number to check!

Alternatively, paying interest (and no fees) on a current account overdraft may be the preferred option.

dimbo61

Ring first active and ask if you can pay your mortgage this month only with a credit card !
worth a try and may save you the 3.5% charge.

getmore4less

PJB9000 wrote: »

Many thanks to all of you for taking the time to respond, I very much appreciate it.

This morning I received my MBNA credit card statement, and with it were a couple of blank cheques. Having read what's on the bumf that came with them, it appears that I can pay one of these cheques into my account, for a 3.5% fee, but I'll be charged 0% APR until September 2009.

So as far as I can see, I can write myself a cheque for £500 and pay it back next month in full, all for a £17.50 premium.

I think this is the way I'm going to go. I'll gladly pay £17.50 if it means a clean credit record, not to mention the weight it will lift off my shoulders.

Once again thanks to you all, you've been a big help. :T

For £17.50 not too bad to keep the clean record.

Whats the interest rate on your OD might be worth considering a plan to get rid of that if cash flow allows using the 0% BT offer.

As long as the CC is currently with Zero ballance(no outstanding spends) then you could just pay the minimum payment till sept 09 and keep the money in a savings account getting some of the fee back.

IF there are outstanding spends then you will need to pay it off in full since any payments will got to the 0% first leaving the spends with interest also no new spends till the 0% is paid off.

getmore4less

opinions4u wrote: »

3.5% plus interest at whatever high rate applies. This means you should repay them before in part of full early - don't wait for the statement as additional interest will be accruing.

How much would you be charged to take cash out of an ATM? Cash advance fee may be 1% lower. Call them on their 0800 number to check!

The OP said it was a 0% BT with fee offer

MY MBNA cash advance fee the same at a BT fee(3%) but with over 2% pm interest. BT(1.6%) and cheque(1.74%) are lower than the cash rates cuurently in a 0% purchase rate.

MBNA do this every year if you ignore the BT offers they eventualy do a purchse one.


Good idea from dimbo61 but it might count as a cash advance so be carefull.