If have missed any mortgage payments, or paid less than you are supposed to each month, then you are said to be in arrears with your mortgage.

In the situation where mortgage arrears exist, the lender will want you to clear the arrears as soon as possible. If you don’t clear the arrears or you allow them to increase futher, the lender will seek to evict you from your home. They will do this by applying to the courts to “seek possession”.

The lender may allow you some time to sort things out, but they will only do this if you get in touch with them. It’s important that you contact your lender as soon as possible to discuss your situation and aim to come to an agreement that suits you and is acceptable to them. The key is to communicate and act quickly.

Some options you can consider are to assess your household income and costs and see if you can make any savings to reduce costs and raise more money to increase income. A good website that is packed with advice on ways to save money on household bills is www.moneysavingexpert.com. Then the extra money can go towards the mortgage.

You can also consider re prioritising your household expenses. In terms of bills, the most important are mortgage payments, council tax and utility bills. The national debline and consumer credit counselling service may be able to help you understand your household income and expenses better by putting together a budget planner. They will be able to advise where you can cut back. One common area is credit card repayments, and they may be able to negotiate reduced monthly payments - as little as £1 per month. Again savings here can allow you to pay
more towards your mortgage.

If your financial difficulties are relatively short term, it may be possible for you to agree with your lender to reduce the cost of your mortgage for a limited time. Depending on the conditions of your mortgage you may be able to reduce your monthly payments; increase the period of
time over which the mortgage is repaid (which will cost you more over the long term); switch to interest only if you are on a repayment mortgage (you will still need to pay back the capital eventually); remortgage with the same or another lender (see www.moneymadeclear.fsa.gov.uk); or suspend or cash in a mortgage endowment policy if you have one (you are strongly advised to seek
independent financial advice before choosing this route). Whatever solution you agree with your lender (or via a judge at the court hearing if it reaches that stage) they will want you to pay off the arrears.

To pay off your arrears, you will need to work out how much you can afford to pay in addition to any normal mortgage payments you will make. You can do this by working out your budget, or getting help to work out your budget from an organisation such as the CCCS(www.cccs.co.uk). Once you know how much you can afford to pay, you then need to consider how you will pay the arrears off. Options here include getting the full amount togeher (for example by borrowing the money from friends or family); paying an amount in addition to your regular mortgage repayments to clear the arrears over time; arranging to have the arrears added to your mortgage balance and so paid off over the mortgage term (this will lead to a much larger amount to be paid back); cashing in or selling an endowment policy of you have one (again independent financial advice should be taken).

Mortgage arrears are a worry, but as you can see there are options. The important thing is to communicate with your lender, act quickly and get extra help and advice where needed.