As we start to move through the Government’s plan to post-Covid normality, we would like to say thank you to our members for all the support, kindness and patience you have shown in the last year.
The following information and guidance will help if you are having trouble making your mortgage payments, or if you can see a problem arising in the future.
- What to expect – What happens when we get in contact and the steps we take to help you
- Your credit rating – How underpayments and missed payments can affect your credit rating
- Leaseholder and shared owner charges – Information on problems paying charges in relation to leasehold and shared ownership properties
- Debt advice – Contact details for debt advice agencies and further information on helping paying your mortgage, including relating to Coronavirus (Covid-19)
- Repossession & legal action – What happens if we do start legal proceedings?
- Other things to consider
We are here to help and will always discuss your circumstances with sensitivity and positivity. The sooner you get in touch, the quicker we can help you, and you may be able to avoid bigger problems in the future.
Before you contact us, it is a good idea to have a full understanding of your current financial situation. We will need to know about your income and expenditure, so take time to fill in our Household Budget Planner (you can download our budget planner from here).
When you get in touch with us we will discuss your situation and how long you may believe you may have difficulty with your mortgage payments. We will review your Household Budget Planner, and from there explore different practical and affordable options with you.
Once we have agreed a way forward, we will write to you to confirm and authorise the arrangement. When you have returned the authorisation to us, we will be able to start the arrangement. If you don’t return the authorisation, we will be unable to start any arrangement with you.
After this, we will review your account as outlined in our arrangement – at least every six months, but it could be more regular. If anything changes, or if you think the arrangement is no longer suitable, let us know as soon as possible and we can review our arrangement.
We will contact you if you miss a payment or believe you are struggling with the arrangement, to explore new options that may be better suited for you. In the unfortunate event that you do miss mortgage payments, you may incur some charges. A full explanation can be found in our Tariff of Charges leaflet.
We report to credit reference agencies if you have missed a monthly payment, or of any financial arrangement we organise with you. If you miss a payment, or have underpaid to the value of one month’s missed payment, it will be reported to credit reference agencies at the end of the calendar month. This means that you have the rest of the month to make up the payment without it being reported. Other lenders do have access to your credit rating, so this may affect your borrowing in the future.
If you have a leasehold or shared ownership property, you will have to pay other charges in relation to your property, which take the same priority as your mortgage payments. These include:
- Service charges – paid to your housing association / management company for the services they provide. This can include the cleaning of your communal arrears, general maintenance and repairs to the building.
- Ground rent – this is the payment you make to the freeholder of the land on which your property is on.
- Rent – if you are a shared owner, you pay your housing association rent for the part of the property they own.
These are paid directly to your housing association, freeholder or management company, whichever is appropriate.
However, if you think you will struggle to make these payments, or if you have failed to pay them previously, you should contact your housing association as soon as possible. You may be able to work out an arrangement with them to become up to date with your payments. If you fail to contact your housing association, freeholder or management company, they will contact us as your mortgage provider to pay the shortfall on your rent / service charges. To prevent forfeiture of the lease and safeguard our security on the property, we will pay the amount needed to bring your account with them up to date on your behalf.
This incurs extra costs to you. We will add the rent payment to your mortgage account, along with administrative fees. Because the rent arrears payment is added to your mortgage account, it starts incurring daily interest on top of your mortgage, making it more expensive for you in the long run.
Whilst we will contact you and try to organise an arrangement (alongside your mortgage payments) to bring your account up to date, it is always better to see if you can make a payment plan directly with your housing association in the first instance. It is important to talk to them to see what they can do to help, rather than rely on your mortgage provider to make the payments for you.
Because we are unable to advise you on your debts with other creditors, you may want to speak to an independent professional money adviser who can offer you support and guidance on your general finances. We encourage you to seek their advice before entering any arrangement. When seeking advice remember to check if there is a charge for any advice first. There are free services, including:
Money Advice Service – 0800 1387777
Citizens Advice Bureau (CAB) - 03444 111444
National Debt Helpline (debt advice and information) – 0808 8084000
Business debtline (self-employed or small business owner) – 0800 1976026
Consumer Credit Counselling Service (CCCS) - 0800 1381 111
StepChange – 0800 1381111
Advice UK (specialist advice for minority communities and people with disabilities)
Christians against poverty
In addition, if you are impacted by Coronavirus (Covid-19), you may want to read:
- FCA’s information page “Dealing with financial difficulties during the Coronavirus pandemic”
- Money Advice Service’s information pages “Coronavirus and your money” and “How to prioritise your debts”
If we cannot agree on a solution or if you fail to maintain your arrangement with us, we may have no other option but to start legal action. If this happens:
- We will inform you in good time that we intend to proceed with legal action, and give you the opportunity to make your account up to date
- We encourage you to attend court and take independent debt advice
- Repossession may not necessarily happen. We will continue to find a solution with you, and repossession is always the last resort
- If repossession does happen, we encourage you to get in touch with your local authority to see if they can help you find a new place to live
If we do repossess your home:
- We will sell it for the best price we can reasonably get, and try to sell it as quickly as possible
- We will give you time to take your possessions from your home
- Any money left over from the sale will be passed on to you
It may be possible that the sale of your home does not cover the amount needed to pay off your mortgage – a shortfall. If this happens:
- We will let you know as soon as possible so that we can organise a way for you to pay it back
- Every borrower is liable for the shortfall – even if you only paid part of the mortgage
- We will take into consideration your income and expenditure to organise a payment plan
- Details of any unpaid shortfall will be passed on to credit reference agencies so may affect your borrowing in the future
There are some companies that may offer you new loans or invite you to sell your property to them and lease it back to you as a way to solve your financial problems. There are also companies who offer to help create a budget and organise your finances, for a fee. Please be careful, as these may not be in your best interests. You can always receive free independant advice before entering into any arrangement that is proposed to you.
You may also consider handing over your keys to us. Please consider this option thoroughly, as you will still have to pay your monthly mortgage payments until the property is sold and it may affect your ability to secure local authority housing. If the property is sold for less than what you owe, you will still have to pay the shortfall.
If you believe that we have not treated you fairly, you have the right to complain. You can visit our customer satisfaction page for details on how to contact us. If you believe your complaint has not been dealt with adequately, you may be able to refer it to the Financial Ombudsman, who can be contacted at:
The Financial Ombudsman Service
E14 9SR. Tel: 0800 0234567
Please remember it is always better to contact us as soon as you realise you may be having trouble paying your mortgage. We are here to help and want to arrange with you a plan of action to help you stay on track with your mortgage.
Our budget planner will help get us a better understanding of your financial situation.