Mortgage arrears query

Newmum92

Hi everyone 

In November 2021 I missed a mortgage payment. It was the only missed payment and have made all payments since. I won’t go into huge detail about the reasons as I have posted lots on the debt free wannabe forum and I have been putting plans in place for debts and ensuring I meet my mortgage and will always prioritise this moving forward.

barclays have since been notifying me every month by letter, text, email that I am in arrears. They want me to set up a repayment plan to clear the 1 months arrears or to pay it off in full- but even the repayment arrangement they want it over 4-5 months so it’s an extra £100 a month which is a lot considering we’re trying to reduce debts atm. 

What are the implications if I simply do nothing? The main concern is will it affect my ability to switch products online in November when my current fix finishes. I won’t be looking to move lenders or remortgage as my credit file is shot at the moment but I want to ensure I can enter into a new fixed deal. 

Do I really need to clear this at £100 a month or will they just simply add it on to the mortgage balance if I don’t? 

Thanks 😊

Thrugelmir

Until you clear the arrears you'll remain in default and in breach of contract. The mortgage should be a priority over your other debts. Despite it being charged at a lower rate of interest. Your lender may decline any application for a new fixed rate product and leave you on the SVR until the arrears are discharged fully. As you are incurring them additional time and expense in administering your account. A cost that needs to be recouped. 

MovingForwards

You could also be incurring additional costs for not having an agreement in place, each letter they send could see the cost getting added to your remaining mortgage balance. Check your original T&C's.

ACG

Your prioritising unsecured debts over a secured debt. 
Appreciate the other debts might be higher rates, but defaulting on one will mean you lose the roof over your head, the others wont. 

Newmum92

ACG said:

Your prioritising unsecured debts over a secured debt. 
Appreciate the other debts might be higher rates, but defaulting on one will mean you lose the roof over your head, the others wont. 

Thanks for the message. I’m not sure where I have said I am prioritising unsecured debts. That isn’t the case and I am making arrangements to start a DMP in a few months time- currently my unsecured debts aren’t getting a penny and will only be getting token payments at best in a few months. I was just asking what the implications would be as I don’t know. If it was a case that it would have a significant impact then I would do whatever I needed to pay it in full, but if 1 months missed payment would just be recorded on my credit file and added to the balance then I would of course pay it when I can but in the mean time would have less sleepless nights. 

TheAble

You don't want to put your home at risk. As has been stated you are in breach of contract; your lender is trying to make an arrangement with you and you should unbend so far as to show willing. Pay them their £100 a month even though you'll have to do without for a while, and bring your account up to date.

Thrugelmir

You'll constantly be in arrears not just a credit file showing one missed monthly payment. Though with a DMP planned. The focus needs to be on resolving your current issues. As your credit history is going to be tainted for the foreseeable future whatever happens. 

K_S

Newmum92 said:

What are the implications if I simply do nothing? The main concern is will it affect my ability to switch products online in November when my current fix finishes. I won’t be looking to move lenders or remortgage as my credit file is shot at the moment but I want to ensure I can enter into a new fixed deal. 

@newmum92 I can't recall Barclays' policy off of the top of my head but a lot of lenders will not allow clients to do a product-transfer/product-switch/rate-switch if they are in arrears. If that is the case with Barclays, at that point your rate could jump to 4%+.

I can't put myself in your shoes and don't know everything in the background, but if you can you should definitely consider bringing your mortgage account up to date or at least get proper debt advice from a charity like Stepchange or CAB. Good luck and hope you are able to switch products in November.