Being in arrears on your mortgage means that you have missed some or all of your mortgage repayment. If you can’t meet your mortgage repayments, or you’re worried you might fall behind, you should contact your lender as soon as possible as missing a mortgage repayment could have a negative effect on your credit rating.
If you miss a payment it is important to contact your lender as soon as possible (preferably in writing). If your lender contacts you by letter or phone, do not ignore this. It is important that you co-operate with your lender. Read every letter your lender sends you and ask them to explain anything you do not understand.
What to do?
- Follow our debt action plan for a three-step plan to tackling your debts. This will help you to get a clear picture of all your current debts as well as helping you set out a new budget to help you prioritise your spending. Before talking to your lender, make a new budget and check your entitlements. Have all of your facts and figures to hand – including a list of your debts, interest rates, how much you still owe etc.
- If you have a mortgage payment protection insurance policy, check if your policy will cover your mortgage repayments for a certain amount of time.
- Remember, you must act quickly – once you have a clear list of all your debts and all your income/entitlements, you should contact your lender to discuss your options. Your lender will have a specially trained person to deal with your case and any meetings between you and your lender to discuss your situation must be conducted in private. If you would feel more comfortable and need some support, bring a relative or friend with you to discuss your mortgage arrears situation with your lender. Under the Central Bank of Ireland’s Code of Conduct on Mortgage Arrears, all lenders must have a Mortgage Arrears Resolution Process (MARP) in place to be used when dealing with arrears and pre-arrears customers. This Code applies to the mortgage of a borrower which is secured by his/her primary residence. This Code sets out how your lender must communicate with you, provide information to you, assess your mortgage arrears situation, come to a resolution and manage any subsequent appeals. All cases must be handled sympathetically and positively by the lender, with the objective at all times of assisting the borrower to meet his/her mortgage obligations. Your lender must give you a copy of the Mortgage Arrears Resolution Process which is a booklet of related information or refer you to online information. The four steps of MARP are Communication, Financial Information, Assessment and Resolution.
- You can contact the Money Advice and Budgeting Service (MABS) which provides free, independent and confidential debt advice and money management services. The MABS national helpline provides information for people in mortgage arrears or pre-arrears on their family home. You can also get information if you are in pre-arrears on a buy-to-let property, but only if it is your property. You can contact the MABS helpline on 0761 07 2000 or log onto their website www.mabs.ie.
- Abhaile is a service to help homeowners find a resolution to home mortgage arrears. It provides vouchers for free financial and legal advice and help from experts, which are available through MABS.
- As part of the MARP your lender may offer you a long-term resolution proposal. If you wish, your lender will pay €250 for a consultation with an accountant from the Financial Advice Service about this proposal. You can find an accountant in your area on the www.keepingyourhome.ie website.
Who else can you contact for help?
If your lender has told you they are going to commence repossession proceedings through the courts, you should get professional advice. The Free Legal Aid Centres (FLAC) offer basic, free legal services to the public. You should contact FLAC as soon as possible to discuss your case before it goes to court.