Help! I can`t pay my mortgage

24 April2009

As a homeowner, your mortgage will almost certainly be your biggest financial commitment. So when it looks like you`ll be unable to meet this month`s mortgage payment, the situation can be very worrying.

When that leads to mortgage arrears, the situation can become even more serious. Lenders understand that some people fall behind on their payments from time to time, but you will still be expected to make those payments as soon as possible, and the interest will continue to grow - so the longer it is left, the more difficult it could become to repay your mortgage arrears.

Priorities and debt

You should remember that all debt is important, and failing to repay any debt can lead to action from your lender. However, if your finances are simply stretched too thin to cover all of your debts, then it`s important to set out an order of priority for each of your debts.

Many people assume that debts with the highest interest rate are their top priority, since they will grow more quickly than debts with a lower interest rate. This may be correct for people with just unsecured debts (credit cards, store cards, etc.), but you should also consider the overall consequences of not paying each of your debts.

Your mortgage covers your home - almost certainly your most important (and expensive) asset - and so should always be your top priority debt. Equally, any other secured debts (e.g. secured loans) should be considered a priority, since they too could lead to your home being repossessed if you cannot keep up on payments.

What if I simply can`t afford to pay my debts?

If you realise that your income does not cover all your debt repayments, it`s important that you take action early to avoid legal problems and prevent your debts from growing.

Step #1: speak to your lenders

Before you do anything else, contact your lenders to explain the situation. In many cases, your lenders may give you a short repayment holiday or accept a temporary reduction in payments to help you get your finances in order.

However, this is only a short-term solution, so if it is unlikely to make a difference to your ability to repay your debts in the long run, it`s probably a good idea to consider a more specific debt solution.

Get expert debt help

A good debt adviser should be able to recommend a debt solution to help you reduce your monthly outgoings and make it easier to pay your mortgage. There are a number of debt solutions available, all designed to help people in different situations. Your debt adviser will help you to establish which one best meets your individual needs.

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Tags: mortgage, cant pay mortgage, mortgage arrears, debt, mortgage debt, mortgage debt advice, mortgage arrears advice, cant afford to pay mortgage

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