Difficulties Paying Your Mortgage

Everyone’s circumstances are different, whether you need temporary support to get back on your feet or a long-term change. Once we’ve understood your situation, we’ll explain your options and their impact, so you can make an informed decision. We aim to help you take back control.

Harpenden Building Society has several solutions if you’re struggling to pay your mortgage. Here are some of the options to consider:

• Arrange a payment plan to reduce your monthly repayments
• Change your mortgage payment date
• Extend your mortgage term
• Switch to interest-only payments for a temporary period
• Arrange for you to repay any missing payments
• Move you into a new, more suitable mortgage product

The specific support available depends on individual circumstances, and not every option will be suitable or available for all customers. You can contact us to see if you’re eligible for any of these options – doing so won’t affect your credit rating.

You can reach us in various ways if you’re worried about mortgage payments. Here are our contact details:

• Address: Harpenden Building Society, Mardall House, 9-11 Vaughan Road, Harpenden, AL5 4HU
• Telephone: 01582 463133
• Email: customeroperations@harpendenbs.co.uk

The sooner you get in touch, the quicker we can discuss the options available to you, based on your individual circumstances. You don’t have to wait until you’ve missed a payment. And remember, just speaking to us won’t leave a footprint on your credit report.

We know talking about finances can be difficult. So, ahead of speaking to us, see below the kind of things we’ll discuss with you:

• The cause of your payment difficulties, so we can understand the issues you’re experiencing
• Details about income and outgoings, plus any outstanding debts you may have
• The potential solutions we can offer to address your situation
• Other avenues and independent contacts you can reach out to for further financial advice or support

After discussing your circumstances and the options available, we’ll explain how the changes will be reported in your credit file, whether there are any additional costs or charges and how any solutions could affect the total amount you pay over the term of the mortgage.

Before agreeing to any arrangements, it’s best to seek independent advice from a free debt advice agency (or other forms of mortgage payment advice or support). We’ll give you time to arrange and attend an appointment before making the best decision for your situation.

Key things to know and actions to take:

• If we try to contact you, please respond swiftly, as it will really help the process
• Keep any other people paying the mortgage, and anyone guaranteeing the mortgage, up-to-date with what’s happening
• Let us know if you move to a new address
• Keep to any payment plan we agree on with you, or tell us if there’s a change in your circumstances that may affect the arrangement
• If you don’t 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 state benefits or tax credits to increase your income
• If you have an insurance policy, check if this could help with your payments
• Be aware of potential costs and charges – if you’re in arrears, we may charge you for reasonable administrative and legal costs (we’ll inform you of any costs in advance)

There’s a lot of impartial advice and confidential support available if you have money worries, and this won’t affect your credit score or involve a credit check.

These independent advisers can help you with budgeting, prioritising debt to help you avoid missing payments and checking your eligibility for state benefits.

Here are some organisations that can help you when you are having difficulties making mortgage payments and meeting bills:

• National Debtline (0808 808 4000)
• MoneyHelper
• StepChange Debt Charity (call them for free on 0800 138 1111)
• Citizens Advice (click on the website link or go to your local Citizens Advice bureau)

You may also want to talk to a professional adviser, such as a debt counsellor or a lawyer. We recommend doing this before you change your mortgage arrangements and getting independent and free debt advice first.

If you’re having difficulties paying your mortgage, there are no guarantees of a resolution. It’s important to understand what can happen if we can’t agree on a solution.

What if we can’t settle on a solution for your mortgage payment issues?

• We may send a debt counsellor to visit you to discuss your financial circumstances, and this cost may be charged to your mortgage account
• We may go to court to start proceedings to repossess your home
• If proceedings take place, we strongly recommend you attend the court and seek independent debt advice
• Starting court proceedings doesn’t necessarily mean that we’ll repossess your home – possession is only the last resort – as we’ll keep trying to solve the problem with you

If we do have to repossess your home, we’ll advise you on how and when to get in touch with your local authority to see if they can find you somewhere else to live.

What if we repossess your home?

• We’ll sell it for the best price we can reasonably get and as soon as possible
• We’ll give you a reasonable amount of time to take your possessions from your home
• Money raised from selling your home will be used to pay your mortgage and any other loans or charges due
• If there is any money left over, we’ll pay this to you

What if selling your home doesn’t raise enough money to pay off the mortgage?

If there’s not enough money from the sale to pay the whole mortgage, you’ll still owe us the amount that’s left (called a shortfall debt). We’ll inform you as soon as possible if that’s the case.

In this situation, here’s what you should know:

• 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’ll contact you within six years of selling your property to arrange for you to repay what you still owe
• We’ll take your income and outgoings into account when we arrange a payment plan for this shortfall debt
• If we can’t arrange a suitable payment plan, we may need to go to court to get our money back, and you may have to pay additional court costs
• If this debt is not paid, it could affect your chances of getting credit in future

Some companies may offer you new loans or even invite you to sell your property to them and lease it back to resolve your short-term financial difficulty. Please be careful, as these types of actions may not be in your long-term best interests. We recommend seeking independent advice before entering into any arrangement like this.

You may be considering handing your keys over to us. If you do this, you’ll still owe us any outstanding debt, so please discuss this option with us before taking action.

If you don’t think that you have been treated fairly, you can make a complaint by following our Complaints Procedure.

If there’s a change in your circumstances, we may be able to make a short-term arrangement to reduce your monthly payments and allow you to sort out your finances. We’ll need to understand what’s affordable and consider how long you’ll need it in place.

We’ll review any agreed arrangement with you regularly to ensure it’s still suitable.

Be aware that your mortgage balance won’t decrease, and interest will continue to be charged. When the payment plan ends, your monthly payment may need to increase to catch up on any shortfall.

Yes, we do have options to move your monthly mortgage payment date to help you manage your money and ensure you don’t miss your mortgage payments due to other outgoings.

You’ll be able to choose to have your payment collected via direct debit on the 5th, 23rd or 27th of the month.

It may be possible to extend your mortgage term and spread repayments over a longer period, which will lower your monthly payments.

In extending your mortgage term (and therefore giving you longer to repay what’s owed), the mortgage will cost more over the full term, because you’ll be paying interest for longer.

If you have a capital repayment mortgage but feel you’d benefit from reducing your monthly payments, you may be able to switch to a solution where you only pay the interest for an agreed (temporary) period. This means your monthly payments will only cover interest, not the mortgage capital (the amount you borrowed).

This would temporarily lower your monthly payments for an agreed period, but your mortgage balance will not decrease during this time (as you’re not paying off the capital), increasing the overall mortgage cost.

When this interest-only period ends, your account will revert to the capital repayment plan. Be aware that your monthly payments will be higher than before you switched, as you’ll be repaying the same balance over a shorter period, from this point.

If you’ve missed payments and are unable to repay these in full immediately, but can afford more than your monthly repayment, you may be able to enter into an arrangement to clear the mortgage arrears over a period that works for you and your finances.

In this kind of arrangement, you’d make your normal mortgage payment, plus an additional amount towards the missed payment every month.

There may be a lower rate available that you can switch to, depending on your circumstances. We understand the need to lower monthly payment amounts, and this is one option to consider. However, this may mean paying early repayment charges. Where these charges apply, we’ll give you clear and full details so you can decide if it’s suitable for you.

When considering these solutions that can help you with your mortgage payment difficulties, you may wish to get independent advice from a free debt advice agency. We’ll allow sufficient time for you to make and attend an appointment, so you can make the right choice before committing to any changes to your mortgage.