If You Cannot Pay Your Mortgage
If you are having trouble paying your mortgage, we will try our very best to help you. This page explains how we will treat you fairly, and what steps you should take to help yourself.
- Contact you as soon as possible to discuss your situation.
- Talk to agencies who give advice (such as Citizens Advice or your solicitor) on your written request, if you want us to.
- Give you reasonable time to pay back the debt.
- Only start proceedings to repossess your home as a last resort if we cannot solve the problem by any other means.
We might be able to
- Arrange a new payment plan with you, taking your and our interests into account.
- Change the way you make your payments or the date you make them.
- Allow you to pay back your mortgage over a longer period of time (which would reduce your monthly payments).
- Change the type of mortgage.
If we cannot offer you any of these options, we will tell you why. If we can make one of these arrangements with you, we will explain how it will work and give you time to consider it. If we cannot offer any of these options, we might agree to you remaining in your home so that you can agree a sale of your property.
What you can do to help us
- Tell us as soon as possible if you are having problems repaying your mortgage or if you think that you might experience problems shortly.
- Seek debt advice if you would like help with managing your finances.
- Respond to us quickly, if we try to contact you.
- Make sure you keep any other people paying the mortgage, and anyone guaranteeing the mortgage, up to date with what is happening.
- Keep to the payment plan we agree with you, or tell us if there is a change in your circumstances, which may affect the arrangement. If you do not make the agreed payments, we might have to go to court to get back any money you owe us or to repossess your property.
- Check whether you can get any state benefits or tax credits, which could help to increase your income.
- If you have an insurance policy, check whether it would help with your payments.
- Tell us if you move to a new address.
You may want to talk to a professional adviser, such as a debt counsellor or a lawyer, before you change your mortgage arrangements. We would strongly advise that you seek independent, free, debt advice.
Costs and charges
We make no charges if you have a mortgage payment shortfall, but there may be costs if we have to take legal proceedings against you because we have not been able to agree a solution.
If we cannot agree on a solution
- We may go to court to start proceedings to repossess your home. If proceedings take place, we strongly recommend that you attend court and that you seek independent debt advice.
- Starting court proceedings does not necessarily mean that we will repossess your home. We will keep trying to resolve the problem with you. Possession is the last resort.
- Before we repossess your home, we will give you advice about getting in touch with your local authority to see if they can find you somewhere else to live.
If we repossess your home
- We will sell it for the best price we can reasonably achieve. We will try to sell it as soon as possible.
- We will give you reasonable time to take your possessions from your home.
- We will use the money raised from selling your home to pay your mortgage and any other loans or charges secured on your property.
- If there is any money left over, we will pay it to you.
If selling your home does not raise enough money to pay off the mortgage
- If there is not enough money from the sale to pay the whole mortgage, you will still owe us the amount that is left (a shortfall debt). We will tell you what this is as soon as possible.
- If you bought your home with other borrowers, each of you is responsible for all the money borrowed. This is true even if you normally only pay part of the mortgage.
- We will contact you within six years of selling your property (five years in Scotland) to arrange for you to pay back what you still owe.
- We will take account of your income and outgoings when we arrange a payment plan for this shortfall debt with you. But if we cannot arrange a suitable plan, we may go to court to get our money back. You might have to pay the court costs.
- If a shortfall debt is not paid, it could affect whether you are able to get credit in the future.
Some companies may offer you new loans or even invite you to sell your property to them and then lease it back as a way of resolving your short-term financial difficulty. Please be careful, as such actions may not be in your long-term best interests. We would advise you to seek independent advice before entering into any arrangements of this type.
You may be thinking about handing your keys over to us. If you do this, you will still owe us any outstanding debt and this may affect your entitlements such as your eligibility for rehousing assistance from your local authority and so we would advise you to discuss your options with us before taking such action.
Income and Expenditure document
Click here to view the Society’s income and expenditure document
Our Income and Expenditure document is designed to gain a full picture of your financial situation to see if we are able to help you with the difficulties you are facing.
If you are experiencing financial difficulties you may wish to consider the following services:
The Governments money advice service provides independent advice on how to deal with mortgage payment shortfalls. You can access this service at – money advice service
The Citizens Advice Bureau (www.citizensadvice.org.uk) provide debt counselling and advice to help you deal with any financial problems.
The BSA (Building Societies Association) offer advice in this PDF document.
StepChange are a debt charity set-up to provide expert debt counselling services. Go to www.stepchange.org for more information.
Shelter also offer information on dealing with mortgage payment difficulties and wider housing issues. Go to shelter.co.uk