Mortgage worries

Struggling to Pay your Mortgage?

We know paying your mortgage will be one of your priorities, but you must let your Mortgage Lender know if you're having problems - don't just stop paying or miss payments. Your Lender should treat you fairly and sympathetically and be willing to negotiate affordable repayment arrangements with you. If they know you are doing your best to stop the debt growing a mortgage lender is more likely to allow you more time to sort the problem out.

You may be able to cut down your monthly mortgage costs. For example, your Lender may agree to reduce your monthly interest payments, increase the term of the mortgage to give you more time to pay, or allow you to make interest-only payments for a while. The ending of a fixed rate mortgage may offer opportunities to reduce monthly payments as interest rates have fallen.

Be wary of so-called 'mortgage rescue' or 'sale and rent back' schemes. Some organisations often buy homes at well below the market rate and you will have little protection from eviction after an initial tenancy of six or twelve months. At first, the landlord might charge a reasonable rent, but if your tenancy is renewed, the rent may go up steeply. In some cases we know about, tenants have become homeless when their sale-and-rent-back landlords have been repossessed.

Check for any mortgage payment protection insurance you may have if you suddenly lose your job or are unable to work because of illness or injury. This information will be available from your Lender and included in your existing mortgage paperwork.

OPEN YOUR MAIL. Don't ignore Court papers and Court hearings. If you are notified that your Lender is seeking possession through the Courts, don't make the mistake of thinking it's all over and you've already lost your home. Don't be frightened by your Lender into believing there's no point attending the Court Hearing. Do go to Court, but get advice first if you can. In any case, look out for an advice desk at the Court run by a free independent advice service. Getting advice even at the eleventh hour will give you a much better chance of saving your home. Housing Advice & Information Service have provided support in Court for vulnerable clients in the past.

For more advice Tel: 01287 612444 or email:

The Council of Mortgage Lenders has some useful advice if you need help meeting your mortgage payments.

Local Advice and Support

Homeowners in mortgage difficulty and/or at risk of repossession can benefit from a new service provided by the Council's Housing Advice Service. From 3rd December, the new Mortgage Rescue Advice Service will help complete financial statements; establish how much households can afford to offer each month for their arrears; look at income maximisation opportunities and make revised payment offers to the court to seek eviction suspensions.
This free service can help all homeowners, regardless of income.

For more information contact your Housing Advice & Information Service at Belmont House, Rectory Lane, Guisborough TS14 7FD or telephone (01287) 612444 or (01642) 774774 or email:

Government Advice and Support
Central Government are aware that many families are having difficulty keeping up with mortgage payments during the economic downturn. In an effort to keep families in their homes wherever possible they have introduced several 'rescue packages' that could help you and your family. The Factsheet Real Help for the Housing Market provides a brief overview of some of the products available to those at risk of repossession (as below), first-time buyers and those in the construction industry.

Mortgage Rescue Scheme (MRS)
The Mortgage Rescue Scheme (MRS) is a product for households who are at risk of becoming homeless because they're unexpectedly unable to meet their mortgage repayments. It aims to help up to 6000 households over two years. However, it won't help people in 'negative equity', which is when the amount owed on your mortgage is more than the value of your home. This product is not available for second or buy-to-let homes.

Essentially there are two elements to this:

  • Equity Loan (previously known as Shared Equity) is where a housing association lends you an interest-only loan which is secured on your home.
You will use the loan to pay off part of your mortgage or pay off any other loans secured on your home. Follow this link for further information:

 icon MRS_Equity_Loan_homeowner_final_version.pdf (77.78k)
Last modified: 15/11/2011 14:18:58

  • Mortgage to Rent a Social Housing Provider will clear the debt and the applicant will pay rent to them.
To be eligible, households must
  • be referred by the Local Authority
  • have someone in Priority Need (vulnerable) as assessed by the Local Authority
  • Household gross income is less than £60k per annum
  • Property is not valued at more than £125,000, however there is discretion to consider properties of a higher value depending on individual circumstances
  • Household must have a financial assessment carried out by agency such as Money Advice
For further information, contact:
Alastair Wood, Housing Services Team Leader
Tel: (01287) 612444

Further Guidance from the Homes and Communities Agency: Homeowner Mortgage Support Scheme

The Homeowner Mortgage Support Scheme is a product which makes it possible for Lenders to reduce interest payments with the deferred payment rolled up and added to the principal loan amount and be paid back when household income improves. This product is not available for second or buy-to-let homes.

To be eligible, households must

  • have experienced reduced income from loss of employment which makes payments difficult. Applicants must be actively seeking work with good prospects of employment.
  • have attempted negotiations with Lenders to resolve/defer their mortgage payments.
  • have been in arrears for a number of months
  • have a financial assessment for eligibility carried out by an agency such as Money Advice
  • have a mortgage no higher than £400k
  • have savings less than £16k
  • not be in receipt of other 'rescue packages'
  • can sustain newly agreed regular payments
Support for Mortgage Interest (ISMI)

Aimed primarily at households where no-one is in employment and welfare benefits are claimed. SMI is a benefit which provides financial support to help homeowners pay the interest on their mortgages if they lose their jobs. It is now available to homeowners who have an outstanding mortgage of less than £200k. People can now get this benefit 13 weeks after they lose their jobs. For further information, please visit Jobcentre Plus.

For further information about any of these products, please follow this link to the website.

If you think any of these products could help you or your household and you wish to speak to someone about making an application, please contact either

Alastair Wood, Housing Services Team Leader
Tel: (01287) 612444

Further Advice:

The National Homelessness Advice Service (NHAS) has provided guidance "Supporting people to exit homeownership through a voluntary or assisted voluntary sale" which describes the options available for households with unsustainable mortgage debt, helping households to explore the possible advantages of exiting homeownership and overcome the barriers they may face. The guide goes through the pros and cons of
  • Voluntary Sale
  • Voluntary Possession
  • Mortgage Rescue Scheme

Download Attachments:
.pdf fileNHAS_AVS_guide_2 CML and public pdf.pdf (423k)

Last modified: 23/09/2011 09:16:56

.pdf fileMRS_Equity_Loan_homeowner_final_version.pdf (78k)

Last modified: 15/11/2011 14:18:58

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