Being in mortgage arrears is not a great financial situation to be in when you have a mortgage on your home. Being in mortgage arrears as a home owner means that you have missed some or all of your regular outgoing payments to the lender that provided you with your mortgage loan. Mortgage arrears can have a serious negative effect on on your credit history and the state of your loan, so if you are in arrears it is important to contact your lender and communicate with them so that you can find the best way to move forward with the situation and create a plan to deal with the missed payments. We will discuss some of the best ways to deal with your arrears so that your credit is not too severely damaged and you do not risk losing your home.
Budgeting
It is important to take some time to organize all debt payments you need to make and prioritize which are the most important. Your mortgage loan is likely the most significant debt you have to repay in your life, and should be your number one priority debt, and should be paid before all others. If your other debts are becoming a problem and making it more difficult to pay off your mortgage payments you may want to contact your other lenders to try and create a better debt action plan that will work for you moving forward and allow you to prioritize your mortgage debt.
Insurance
Oftentimes home buyers will have some kind of mortgage payment protection policy included in the purchase of their home. If you are struggling with mortgage arrears it is a good idea to check if your plan will cover your mortgage payments for a specified period of time .
Communicating with your Lender
Once you have established a clear picture of your debt payments and checked your insurance coverage, you should then start making a plan with your mortgage lender. According to the Central Bank’s Code of Conduct on Mortgage Arrears lenders are required to have a Mortgage Arrears Resolution Process (MARP). The MARP is used for customers who are in pre-arrears or arrears and will apply to a customer’s primary residence. This process exists so that you and your lender can establish a clear line of communication, assess the situation surrounding your missed payments, and create a solution for settling any appeals you have made.