Important Messages
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Mortgage payment difficulties
Mortgage payment difficulties
We all have to deal with the unexpected, some of which can put lots of pressure on our finances. If you’re feeling concerned or panicked about your mortgage repayments it makes sense to talk to us.
We have lots of experience in helping our customers through financial difficulty when they might not be able to pay their mortgage. Whether this is the first time you have contacted us or have been in contact before, chances are we’ve helped someone just like you in similar circumstances, so we feel confident that we can work with you to explore different options which may help.
The main thing to remember is to act now - the quicker you get in touch the sooner we can help. As soon as you realise you may have difficulties in making repayments, please contact us.
What is the Mortgage Charter?
On 26 June 2023, the government published the Mortgage Charter. The charter is a set of commitments agreed between the government, UK lenders and regulators to give more options and support to people struggling with their mortgage payments. We haven’t signed up to the Charter, but we’ve agreed to follow its principles at the moment. From 30 October 2024, we will be reducing the months in advance you can secure a new rate from 6 months before your deal ends to 90 days.
The Charter only applies to borrowers who are up to date with their mortgage payments. If you are in arrears and are struggling, please speak to our Arrears Team on 01799 582922 who can go through a range of options which may be suitable to help you to get back on track.
What does this mean to you?
If you're up to date with your payments, you can:
This can be up to 90 days before your current mortgage ends. That new rate will be confirmed, even if our rates increase.
We’ll allow you to extend your term up to a maximum age of 67 under the principles of the Charter. You can do this without us carrying out our usual checks to make sure you can afford this. You must tell us what term you want.
If you choose this option, you’ll be extending the term (length) of your mortgage. This means you’re agreeing to pay your mortgage over a longer period of time.
This means your payments will be lower each month, but you’ll pay more interest overall. The total amount you pay over your term will be higher.
If you extend your term, but change your mind in the following 6-months, you’ll have the option to change back to your original term. You can do this without making another application to us, which means we won’t need to carry out more checks to see if you can afford this.
If you miss any mortgage payments, this will be reflected in your credit file. This may affect your ability to take out credit in the future.
You can only take this option once during the life of your mortgage with us.
You can’t take this option if you are currently in arrears because you’ve already missed any payments. Call us – we’ll have other ways to help.
If you choose this option, you’ll start a 6-month period of temporary interest-only payments. This means your monthly payments will only cover interest – not the mortgage capital (the amount you borrowed).
When this temporary period ends, you’ll go back to paying your mortgage in the usual way. Your payment will cover both the interest and the capital again. Your payments will be higher then because you’ll be paying off your mortgage over a shorter term.
You’ll pay more in interest overall, but this could give you some breathing space as your payments will be lower for 6-months.
You can only take this option once during the life of your mortgage with us.
You can’t take this option if you are currently in arrears because you’ve already missed any payments. Call us – we’ll have other ways to help.
It is vital that you contact us as soon as you realise that you are going to struggle to make repayments - the earlier the better. Simply contacting us will not affect your credit file rating and our trained and experienced staff will be on hand to help. If you're struggling - or think you might be soon - please do speak to us as soon as you can. Our specialist advisers are here to help and can offer a range of options to help you find a way through.
We won’t force anyone to leave their home for at least a year after their first missed payment.
If you would like any more information about the options detailed above and what it means to you, please give our Arrears Team a call on 01799 582922.
What happens if I miss a mortgage payment?
A shortfall equivalent to two or more months' repayments means you are officially in arrears.
If you’ve missed your mortgage payments and have payments overdue, then you’re ‘in arrears’.
If your mortgage account is behind by one monthly payment or more, we’ll report this to credit reference agencies. This may affect your ability to take out credit in the future.
It is vital that you contact us as soon as you realise that you are going to struggle to make repayments - the earlier the better. Simply contacting us will not affect your credit file rating and our trained and experienced staff will be on hand to help.
How we will help you
When you call us, we will:
- Talk through your situation, to try and understand why you’re having difficulties.
- Ask you about your income, outgoings and debts.
- Discuss any health conditions or special circumstances which may affect your ability to pay your mortgage, to understand the duration and impact of these concerns.
- Explore practical solutions that you can afford. We may be able to:
- Arrange a new payment plan with you - for example, change the way you make your payments or the day of the month you pay.
- Increase the term of your mortgage by allowing you to pay over a longer time, which could reduce your monthly payments.
- Change the type of mortgage you have - we may be able to find one that fits your current circumstances better.
- Offer a concession which is a temporary reduction in your mortgage payments.
- Capitalise your arrears. We may consider capitalisation of arrears. This is where we may add your arrears to the total amount you owe and pay it back over the remaining term of your mortgage.
- Any arrangement we come to with you will be reflected in your credit file, potentially affecting your ability to borrow money in the future.
If these options aren’t suitable, you might be able to stay in the property while you try and sell it. If you’re in arrears, we’ll charge you for reasonable administrative and legal costs, but we’ll make sure you know how much these will be. If you miss a mortgage payment or fall into arrears you could be liable for extra charges so it's important you speak to us as soon as possible if you have trouble keeping up with your payments.
Repossession
It’s important to remember that repossession is always a last resort. We will only start to consider the repossession of the property as an option because we haven’t been able to resolve the problem with you. Talking to us as soon as you have any difficulty gives us a chance to look at as many different options as we can.
Other Organisations which can help
If you require support with navigating your finances, there are many types of free and impartial money guidance and debt help available to you, on-line, by telephone and face to face. We would encourage you to use the on-line services first as these can provide you with the quickest response.
You can find free help to manage money and debt from the following sources:
Other Organisations which can help
Offers online or telephone help to deal with several debts.
0800 138 1111 (Freephone).
For free independent advice in your area, you can find your local CAB in the phone book or through citizens advice’s website search tool: www.citizensadvice.org.uk/index/getadvice.
Offers a free, confidential and independent phone service. Their website also contains fact sheets and a self-help pack.
0808 808 4000 (Freephone).
Provides free, impartial debt advice to small businesses and the self-employed.
Tool to work out a budget to help you take control of your money
www.moneyadviceservice.org.uk/en/tools/budget-planner
Tool which provides guidance according to your personal needs and which in a matter of minutes can inform you what extra help and support you’re entitled to, help you understand the money issues you need to tackle first, how to stay on top of bills, and where you can get more free advice for debt, housing or redundancy.
www. moneyadviceservice.org.uk/moneynavigatortool/Creditor
Impartial information on payment deferrals
www.moneyadviceservice.org.uk/en/articles/mortgage-payment-holidays
For most people, it makes sense to pay essential expenses and priority debts before any other non-priority debts or non-essential spending. To see what is right for you, you can use this guide on how to prioritise your debts
www.moneyadviceservice.org.uk/en/articles/how-to-prioritise-your-debts
Help to locate debt advice, online, by telephone or face to face
www.moneyadviceservice.org.uk/en/tools/debt-advice-locator
What to do next
If you're worried about your money and mortgage repayments, please call us. We know through experience that the quicker you talk to us when problems arise then there will likely be more options available to help you.
Call us on 01799 582922 or tell us about your situation via our payment difficulty enquiry form.
Getting in touch
Before you get in touch with us, it would help if you can get some information together about your finances. We’ll need this information to best understand your situation. If you have a health condition or special circumstances which affect your ability to pay your mortgage we will ensure you are treated fairly in view of these. With your consent to record the details of your circumstances, we will take your personal situation into account when considering your options.
Our Personal Budget form can help you put everything together. Please contact us on 01799 582922 for help with completing this form.
If you’d like to get some help before you talk to us, there are many free debt advice organisations that you can speak to – please refer to the ‘Other Organisations which can help’ section above. With your consent, we can liaise directly with these organisations after you have contacted them.
Should you want someone else to call us regarding your money worries, we are happy to talk to them with your authorisation to do so.
If you do not think we have treated you fairly and you wish to make a complaint please refer to our complaints procedure.
Things to Remember
- Speak to us as soon as possible if you are having problems repaying your mortgage or think that you might experience problems shortly.
- Contact us quickly if we try to contact you and remember to keep the Society updated with any changes to your circumstances.
- Make sure you keep any other people paying the mortgage, and anyone guaranteeing the mortgage, up to date with what is happening.
Things to Remember
- 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.
Additional information
Costs and charges
If you are unable to make a payment it is important that you contact us as soon as possible as costs may be applied in accordance with our tariff of charges.
If we cannot agree on a solution
We may go to court to start proceedings to repossess your home. Starting court proceedings does not necessarily mean that we will repossess your home, we will keep trying to solve the problem with you.
It’s important to remember that repossession is always a last resort. We’ll only start looking at repossession if we have no alternative because we haven’t been able to resolve the problem with you. Talking to us as soon as you have any difficulty gives us a chance to look at as many different options as we can. Before we repossess your home, we recommend that you get 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 get
- 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
- 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 took out a loan with a high loan to value ratio and we took out insurance cover to mitigate financial losses in the event of a default on this mortgage and Saffron Building Society makes a claim to cover any shortfall, the insurer has the right to recover from you any monies paid to us. We may seek to recover on the insurer's behalf the money you owe at the same time as recovering the balance of our loss which was not covered by indemnity insurance
- 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 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 additional court costs
- If a shortfall debt is not paid, it could affect whether you are able to get credit in future
Other issues
Some companies may offer you 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 interests. We would advise you to seek independent legal advice before entering into any arrangement of this type.
You may be thinking about handing your keys over to us. It would be better to try and sell the property yourself, rather than hand back the keys or do nothing to avoid paying additional costs. The Citizens Advice website provides more information on this. Please talk to us before taking such action as we can work with you while you sell your property.
We must advise you that if you fail to make your mortgage payments and we are unable to reach an agreement with you to repay the debt, we will record the default with a credit reference agency. The default will remain on record with the credit reference agency for six years. We may appoint a Solicitor to act on our behalf in the recovery of the debt. We will inform you before we disclose your details to them.