What to do if you can’t pay your mortgage or you have missed a payment Can’t pay your mortgage or missed a payment? The cost of living crisis is hitting hard and there are warnings of a long recession. Many people are facing uncertainty around their jobs and meeting their monthly outgoings including their mortgage. Debt can be a crippling and very stressful experience, knowing what to do in these circumstances can help to ease the pressure. Find out what to do if you have inadvertently missed payment or are struggling to pay your mortgage. What are mortgage arrears? Mortgage arrears occur when, for whatever reason you miss a mortgage payment. Missing a mortgage payment will be noted on your credit record, but these are blemishes and not longstanding damaging marks. If you miss three or more payments then your mortgage account will be put into default. This is registered automatically by lenders and will be marked on your credit record. This does have more impact on your credit record and your ability to obtain credit. Most lenders will try and find a resolution with you before starting the repossession process. What to do if you miss a payment If you miss a mortgage payment you should immediately review your finances to find out why. Was it a simple error or are you struggling? If there was an error contact your lender and let them know that there was a mistake and that you have the funds available. They will then advise how to make the payment. If you pay by direct debit, in most cases the payment will be requested for a second time and it is only after the second attempt that the payment will be officially classed as missed. What to do if you can’t pay your mortgage If your missed mortgage payments are due to financial difficulties and you are struggling to make ends meet in these difficult times there are a number of things you can do. First review your finances and look at income and expenditure, can you cutback on any expenses? Do you have any entertainment or sports subscriptions for example? Can these be put on hold or cancelled to help you get up to date with your mortgage? Talk to your lender Once you have reviewed your finances if you are still experiencing difficulties then you should call your lender. Lenders have procedures in place to help. They will want to know more about your income and expenses, ask if this is a one off problem or a continuing issues. They will then outline any options they have to help you for example for a short term issue they may be able to offer a payment holiday. A payment holiday should allow you some time to implement lifestyle changes or to look for alternative income for example from a second job. Mortgage payment protection policies When you applied for your mortgage you may have also taken out protection. You should check if you have any mortgage protection and if it includes mortgage payment protection. Check the terms of the policy to see if you can make a claim. remortgaging Depending on your circumstances one solution to mortgage debt may be to remortgage. If you are on a standard variable rate deal for example, there may be better deals available which could reduce your monthly payments, making your mortgage more affordable. Extending your mortgage term Some lenders will allow you to extend the term of your mortgage. This will depend on your individual circumstances and your age. Whilst this does resolve the current issue and will reduce your monthly payments it does mean that it will cost you more in the long term. Get advice from your lender and an independent unbiased mortgage broker before agreeing. You may be able to reduce your payments and save a considerable sum by remortgaging instead.