What are my options with arrears? HELP

seanacy

Hi
Last month I had a letter from my mortgage company saying the last two months payments had not gone through, the money was there at the time but the lenders direct debit facility was not activated?I know I should check my balance but I didn't and did not have the money to give them two months worth of mortgage payments, with christmas and everything.
So I rang them up and they arrage to spread the two months payments and add them to the next six months, starting with Jan. 1st, but I do not have enough funds to pay all of it,they want £1100.
What I should add is that my house is on the market and should sell with in the next 3 months, what's the best way to go about this situation,I've tried for loans to cover me for the next 3 months but due to 3 loans for building work I can't get one.
I'm a bit stuck and worried that I'll lose the house before I can sell it.
Can anybody give me some advise PLEASE.

chugalug

Hi - are you saying that you cannot afford to pay your current mortgage let alone the arrears? If you are then you are in a bit of a tricky situation but not hopeless. In my experience, your lender will start action once you have missed 3 payments and proceedings will be started to take possession. Will this happen on 1st Jan? If you are hoping to sell in the immediate future then I dont think things will move fast enough for possession to be granted before the sale goes through. Procedures have to be followed ie warning letters, possible negotiations, court summons, hearing, etc. If the case does get to court before you have completed a sale then you can ask the Judge to give you time to complete. If you have a buyer he/she is likely to give you a short time. The best advice I can give though is pay as much as possible to your mortgage account even if you cant make the full payments, go to CAB as you may need to produce a financial statement for your lenders or the court and keep your lenders fully informed of your situation. Try to avoid repossession as this will cost you dearly. Good luck.

Jonni2bad

This is by no means a definitive answer, and you should really get some specialist advice, but I believe if you have not previously been in arrears on your repayments, then they might well consider capitalising the debt, which means that the outstanding sum is added to your existing loan.

Don't assume that the house will sell and cure your problem for you, it may take many more months. You need to take the initiative and sort this out yourself.

Capitalisation certainly worked for me last year, although my own reason for missing payments was due to redundancy. You should contact them asap and try to negotiate a reduced repayment sum, but all the time make as much effort as possible to repay as much as you can. If you are currently repaying other unsecured loans, then maybe it is time to consider contacting these lenders to see if you can have a temporary reduction in payments??

Also, stop any spending that isn't a real priority - your house is THE most important thing.

Anyway, found a couple of web sites that offer advice, you might benefit from reading these...

http://england.shelter.org.uk/advice/advice-232.cfm

http://www.moneymatterstome.co.uk/9-Implications-of-finance/Sub1/MortSub-MethodsOfRepayingYourMortgage.htm

I'm quite happy to offer further advice based on my own experiences if you want, but don't wish to ramble on in here! Just send a message..

Good Luck

seanacy

Thank you very much for your help and links, very usefull

ffs

What are your plans once your house is sold? Will you need a mortgage on a new property? Are you moving in to rented accommodation? Or have you sold up to go travelling for several years? Assuming its not the last option then think carefully about how your arrears will affect your future living arrangements.

seanacy

WE will be buyig a new house but not as much as this one and pay off alot of the debt with the profit from the sale of the house.

hopeless_case_2

go backto your mortgage people ask them to re do the figures by what you can afford and make sure you pay your next months on time. This happened to me and they were very helpful.

nomoneytoday

Talk to the lender.

The Building Society would rather come to an arrangement as it costs them to take court action, send letters etc

tom188

Has anyone noticed this is a post from december 2004?? one hopes it has got sorted by now.