Mortgages – What we can do to help

A mortgage is typically arranged over 25 years. We understand that over such a long time your circumstances may change. This long timescale gives us a lot of room for flexibility, so if you talk to us we can probably help you, and agree a change to your payments, temporarily or permanently. Here is a brief overview of the things that we may be able to do, depending on the type of loan you have, your personal circumstances, and subject to our lending criteria.

Temporary changes

Most importantly for us and for you, when a change is agreed and maintained, we do not incur the costs of arrears administration, so you do not have to pay the monthly arrears charge. How the change affects your payment is shown in the information we give to credit bureau, which may affect your credit rating. Possible temporary changes include :-

• Payment holiday - this is a planned interruption of your monthly payment for up to 12 months. In emergency, eg on bereavement, hospitalisation, etc. a payment holiday for up to 3 months may be granted.
  
  
• Concession - this is a temporary reduction in your monthly payments. The monthly arrears charge is waived when a concession is agreed and maintained. The amount not paid during the concession increases the arrears, (so it will have to be repaid through a future arrangement). Any unpaid interest is added to the balance, and interest is charged on it.
  
  
• Arrangement - a temporary agreement to make overpayments to repay arrears, or the amount underpaid during a concession. The monthly arrears charge is waived when an arrangement is agreed and maintained.
  
  
• ISMI - If you are claiming Income Support or Pension Credit, the government may make a payment towards your mortgage, called Income Support for Mortgage Interest (ISMI.) Ask the Department of Work & Pensions (DWP) for further information.

Permanent changes

Permanent changes to the way your account is managed have implications, which you will need to consider. Talk to us, and we will explain the implications so you can make an informed decision. Such changes are only possible if in accordance with our lending policy and underwriting criteria. Permanent changes are not available where the loan is regulated under the Consumer Credit Act.

• Change loan type
  
  
  • If you have taken out a repayment loan, then it may be possible to reduce your payments and just pay the interest. Of course, the capital will have to be repaid eventually, your plans to do this must meet our underwriting criteria
    
    
  • If you are only making payments of interest on the mortgage debt, but are also paying towards a savings plan that will repay the capital of the loan, it might cost less overall to convert to a capital and interest repayment loan
  
  
• Extend Term - If you have taken out a capital and interest repayment loan, extending the term (i.e. the life) of the loan, can reduce your payments.
  
  
• Consolidation - if you have resolved your financial difficulties, and have made full payment for the last 6 months, we may be able to add the arrears outstanding to the balance of the loan.