Home truths: 5 things to avoid if you’re struggling to pay your mortgage
With the latest figures showing that there are 28,000 households in mortgage arrears by more than 720 days, many families throughout Ireland are facing the prospect of losing their homes.
If you find yourself falling behind on your mortgage, there are people who can help you. These people can be accessed through Abhaile, a state-funded mortgage arrears free support service that works to help people to stay in their own homes.
You can sign up to Abhaile through Money Advice & Budgeting Service (MABS) to get free financial advice and access to professional services like solicitors and personal insolvency practitioners (PIPs). We spoke to James Quinlan, a dedicated mortgage arrears advisor with MABS to discover what you should avoid if you find yourself in arrears.
1. Don’t bury your head in the sand
It can be tempting to ignore the problem if you start missing mortgage payments. However, the sooner you engage in the Mortgage Arrears Resolution Process (MARP), the more chance there is of finding a resolution.
“We find the biggest problem is burying your head in the sand,” says James. “You’ve got to address the problem. It is very, very important that you seek assistance. Help is there.”
It is a stressful time. The thought of having to negotiate with your lender or deal with an impending court case can be daunting but that’s where Abhaile comes in. This free service gives you access to expert advice and support from dedicated mortgage arrears advisors, court mentors, PIPs and solicitors.
This support network will tell you what your options are, help you to negotiate the MARP, and ultimately do everything possible to keep you in your home.
2. Don’t panic
It’s easy to panic if you fall into arrears and can’t see any way out. James advises homeowners that there are plenty of potential solutions out there, even if things look bleak at the moment. You might feel pressured into making a decision but Abhaile is here to help, so you don’t have to make the decision on your own. The first step is to contact Abhaile before making any rash decisions.
“We’ve seen situations where people say ‘Look, I’m too late now. I’ll just save for a deposit on the house I’m going to rent down the line and I’ll save for the rent I’ll need when I get in there.’ We say ‘Hold on, you’re in your house, you’d like to stay in it if that was a choice - let’s work on that first.’”
Abhaile will do everything it can to keep people, wherever possible, in their own home. “If things don’t work out, we’ll cross that bridge,” he adds. “As long as you’re in the house, there’s an opportunity to try and stay in that house. We can look at trying to get a deal in place or look at Mortgage to Rent if that suits your needs.”
3. Don’t neglect the paperwork
When you start to engage with your lender, one of the first requirements will be to provide a financial statement and supporting documentation like payslips, social welfare receipts or bank statements. That might be a headache but it’s an essential part of the process.
“Common mistakes include not completing the financial statement correctly or not supplying back up documentation like payslips or bank statements,” explains James. “It delays the process. The quicker you get that information in, the quicker you can get involved in the process.”
Luckily, Abhaile can help. You can chat to a dedicated mortgage advisor to find out exactly what you need to provide to your lender. They can also help you to complete your financial statement and talk you through the paperwork that’s required. That reduces the chances of errors and speeds up the resolution process.
4. Don't ignore a court summons
If you’ve been ignoring your mortgage arrears situation and refusing to talk to your lender, there’s every chance that your case will eventually end up in court. That can be an intimidating prospect for many people.
“People are so afraid of the court process,” says James. “There’s a huge fear of going to court.”
“It is very, very important that people attend the court to show you want to engage with the process. The mere fact that you’re going there is saying that you want to fight for your home.”
The Abhaile scheme has court advisors and duty solicitors at courts around the country to provide support to homeowners or, where possible, to speak on their behalf at court. Homeowners can also talk to court advisors and solicitors ahead of their court date by contacting Abhaile directly through the MABS dedicated helpline on 0761 07 2000.
Talking with a MABS advisor will benefit you in court as it is regarded as evidence that you are actively engaging with the process, presenting a more positive situation for the homeowner. Even if your lender has already issued you with a court summons, you can still contact Abhaile and discover what to do next.
5. Don’t hand back your keys
For some homeowners, it can be tempting to hand over their house keys to the lender and hope that it all goes away. James says this can be a big mistake.
“Get involved in the negotiation process and see if anything can happen for you,” he advises. “It’s very, very important. People see doing that [handing back the keys] as an ‘out.’
“They hand over the keys and then they say “Well, sure I’ve done this. Now I’ve found myself paying rent that’s way over the odds. I could be paying a lot less and still be in my own home.’”
“We all know the way that rent has gone at the moment. Some people are paying more on rent than on their mortgages.”
Before you even consider handing over your keys, talk to the experts at Abhaile and then decide what you want to do next. There may be options like personal insolvency or Mortgage to Rent that you can avail of that will allow you to stay in your own home. Don’t give up on your home without finding out what your best options are.
If you or somebody you know is in mortgage arrears, or you fear you are at risk of losing your home, you may be eligible for free face-to-face financial or legal advice under the Abhaile scheme. For information, call the MABS dedicated helpline on 076 1072000, or visit the website.