Sometimes things happen in life that places homeowners with the burden of managing their mortgage. Maybe the mortgage was not the best-structured financing plan, layoff from a job, illness, divorce, and many more factors can contribute to falling behind on mortgage payments.
At Fairway Independent Mortgage, we pride ourselves on placing our customers with the BEST FINANCING solutions available. However, we understand that LIFE HAPPENS. Therefore, we thought we would share this useful article that provides several tips for managing your mortgage debt.
Original Post | CitizensDavice.org | “How to Deal With Mortgage Debt” | May 15, 2019
Mortgage Debt Payment Tips
If you’ve been struggling to keep up your mortgage payments, you may have started to build up a debt. You may have missed one or more monthly payments or be paying less money each month than you owe.
You will need to work out a way to pay back what you owe. If you don’t and the debt continues to build up, your lender could take you to court and you may end up losing your home.
Here are some tips to pay back the money you owe on your mortgage payments:
- making extra payments on top of your usual monthly payments
- adding what you owe to your capital
- giving up your endowment policy to raise extra cash
- borrowing money to raise extra cash
- cashing in a mortgage payment protection insurance policy.
You may have other options for dealing with your mortgage debts than the ones mentioned on this page. For more information about these, see More options for dealing with mortgage problems.
Once you’ve worked out a way of dealing with your debt, you will need to come to an agreement with your mortgage lender.
For more information about how to come to an agreement with your mortgage lender, see Dealing with your mortgage lender.
If you don’t have any options for paying off your debt or can’t reach an agreement with your mortgage lender, you should get help from an experienced debt adviser straight away. You should also consider an alternative mortgage broker who may be able to assist.
You should also get help if you’ve started getting letters from your mortgage lender threatening court action.
You can get debt advice from a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.
You might also find it helpful to look at What happens if your mortgage lender takes you to court.
If you’ve got some money to spare each month, you may be able to pay back what you owe by making extra payments on top of your usual monthly mortgage payments.
To work out if you’ve got extra money to spare and how much, you will need to work out how much money you’ve got coming in to your household each month and how much you need to pay out on bills and other expenses. This is called working out a budget.
When you’ve worked out your household budget, including any extra income you can earn, you’ll be able to see how much money you have left over to pay off your mortgage debt. You will need to write to your lender and explain what you’re proposing to do.
For more information about how to write to your mortgage lender, see Dealing with your mortgage lender.
If you’ve fallen behind with your mortgage payments, you will need to take a good look at your household budget. This will tell you if you’ve got any money left over which you can use to pay off your debt.
You will need to make a list of all the money you’ve got coming in and all the money going out of your household. This should include any other debts you owe. Make sure that the amounts you put down are realistic.
You can use the online budgeting tool to help you do this.
Think about whether it’s possible to increase the money you’ve got coming in or make cutbacks on your spending. Here are some helpful alternatives to consider:
- claim benefits or tax credits
- work overtime or take a second job
- take in a lodger or rent out a room in your home
- reduce the cost of household bills like water, gas, electricity or insurance.
There are lots of different ways to boost your income and spend less on your outgoings. For more information, see Budgeting.
An experienced debt adviser can help you work out how much money you’ve got to pay off a mortgage debt and any other debts you owe. They can also advise you about ways of increasing your income and spending less money. You can get this advice from your local Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
You might be able to clear your mortgage payments debt by adding the money you owe to your capital (the amount you borrowed) and paying it back over the remaining period of the mortgage. This is known as capitalizing the arrears. You could also ask to extend the term of the mortgage in order to keep your monthly payments down, although you will end up paying a much larger amount in total.
To learn more about ways to assist with paying off your mortgage debt, please refer to the FULL ARTICLE here. You may also CONTACT Michael Dunsky by calling 508.245.0705 or email firstname.lastname@example.org.
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