If you’re behind on your mortgage payments, what are your lenders expectations?

Unfortunately, many homeowners are currently falling behind with their mortgage payments, leaving them full of worry and loss of focus on the things that matter. One of the focus points often missed is the expectations of the lender, which if understood correctly and with careful planning, the worry and stress can be eased and pave the way for a favourable outcome.

One of the first things lenders expect is open communication. Ignoring their letters or calls can worsen your situation. Lenders appreciate when you are proactive and reach out to discuss your financial difficulties. This demonstrates to your lender responsibility and a willingness to find a solution to your current situation.

Being fully transparent and presenting a financial statement that outlines all your income, expenses, debts, and assets, will go a long way in helping them understand your situation better and assess your ability to repay the arrears. It’s like laying all your cards on the table, ensuring that there’s a clear understanding of your financial health.

Proposing a repayment plan is a good way to start but you must make sure that it is realistic. This could involve temporarily reducing your monthly payments, extending your mortgage term, or capitalising the arrears. Your proposal should be feasible based on your financial statement and reflect a genuine effort to clear the debt.

Be prepared to adjust your lifestyle to fit in with your repayment plan. Lenders want to see that you’re making efforts with your finances. This can include cutting non-essential expenses, renegotiating other debts, or even seeking additional income sources. Evidence of such adjustments shows that you’re serious about managing your arrears and committed to staying on top of your mortgage payments.

The use of financial guidance or even counselling services are strongly suggested! Showing that you’ve sought advice can work in your favour. It indicates you’re taking proactive steps to understand and manage your situation better. Organisations like the Money Advice Service and National Debt line can offer invaluable support and guidance to borrowers in arrears.

Finally, flexibility and a cooperative attitude go a long way. While you might have a repayment plan in mind, be open to suggestions from your lender. They may offer alternatives that are more suitable for your situation. Demonstrating a willingness to work together towards a solution can foster a more cooperative relationship with your lender.

By maintaining open communication, presenting a clear financial picture, proposing realistic repayment plans, adjusting your finances, seeking professional advice and remaining flexible, you can get through the challenges of mortgage arrears!