Getting A Mortgage With Existing Arrears

Mortgage lenders regard mortgage arrears very seriously. If you have current mortgage arrears, you will need to take some action to recover the situation. If you do nothing, the debts will get worse and ultimately the mortgage lender will seek repossession of your property. This will allow them to sell the property and use the money from the sale to pay off the debt.

Depending on your circumstances there are things you can do:
Negotiate with your current lender.

You will need to be able to keep up your current instalments and pay off the arrears. If your difficulties are short term you could ask if they would consider reducing your payments for a limited time.

Before you negotiate you need to work out how much you can realistically afford to pay off the arrears. Work out how much money you have coming in and how much going out.

Re-mortgage with a different lender

This is usually the most effective solution as if you have a number of outstanding credit agreements you could consolidate these into a single monthly mortgage payment. The advantage of doing this is that you can spread the cost over a longer period, this is likely to make a significant reduction in your outgoings. The down side is that these loans will now be ’secured’ against your property. This means if you are unable to make the payments there is a possibility your home could be re-possessed.

Mortgage application with arrears

If you currently have arrears on a mortgage or secured loan then you are likely to pay a higher interest rate on any new mortgage. Arrears on a credit agreement will show up on your credit history for up to 6 years. The more recent the arrears the more effect they will have on a mortgage application.

To get help on Problem With Mortgage Arrears or a No Proof of Income Mortgage visit the Heron Mortgages website and ask them for a quote.

Depending on your current circumstance it may be possible to arrange a re-mortgage in order to clear your arrears.

Generally lenders will be fairly understanding about your arrears but it is best to do something about the problem as soon as possible. The longer you leave it the worse the situation will become.

Most mortgages are repaid over 25 years. However if you are having problems meeting you re-payments it may be possible to extend the term to say 30 or even 35 years. This will reduce your monthly payments. If your difficulties are short term you could always reduce the term again when you are in a position to do so.