Can’t Afford Mortgage Payments – What To Do?

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The economic challenges the UK has faced in recent years have resulted in an increased burden on homeowners throughout the country. High interest rates, rising living costs, and rapid changes to employment statuses have been cited as the main factors contributing to this. Still, there’s also the global shakeup of pandemics and market instability. 

It’s no wonder, then, that many have found it too difficult to be able to make their mortgage payments. Despite this hardship, there are ways to vastly improve this situation. We’ve put together this helpful guide if you are one of those struggling to make your mortgage payments each month so you can plan effectively for the future.

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Gather Your Financial Details

There is only a single reasonable option when you find yourself unable to make mortgage payments, and that’s to negotiate with the mortgage lender. However, before we even think of doing this, we must make the necessary preparations. 

The financial details you’ll have to gather consist of the following: 

  • Financial Documents – These consist of official statements from your bank, taxation bodies, government benefits and your work payslips. Ensure you gather comprehensive details of any freelance or unconventional work that you do as well. 
  • Record Your Monthly Expenses – Putting together details on where your money has to go per month will highlight your available options more succinctly than anything else on this list. We also find that it alleviates a lot of stress about the situation, and often leads to great comebacks. 
  • Find the Change in Your Fortune – For some, this may be easy, such as job loss or a salary reduction. For others, it may be an ongoing vital expense. Nonetheless, gather concrete information about it. 


Going into negotiations without these three factors is not going to lead to a favourable outcome. When you do get this information together, however, you’ll be ready to continue to the next step – negotiations with your lender. 

We will explore two main options for this. 

Option 1: Contact Your Mortgage Lender Yourself

Make it your priority to contact your lender once you decide it’s no longer possible for you to make your monthly payment. We understand this may seem intimidating, but it’s essential to get ahead of the problem. 

When you inform your mortgage lender, ensure you’re as transparent as possible about your financial situation. Ensure that you let them know you’ve got the financial details of the previous section, and relay whatever information they need. This demonstration of your competency, as well as your willingness to work this situation out, will benefit both of you. Remember – they are part of a business. It’s in their best interest, as well as yours, to work this issue out.

From there, it’s a matter of seeing where the conversation goes – and recording it. If not through audio, ensure that you record who you’re speaking to, the time, and any solutions/suggestions. After all, if it’s not in a contract, then it’s not much more than a conversation. 

This is a fairly complicated process for many, and all of the power is in the hands of mortgage lenders rather than the borrower. However, there is a second, better way to go about this if you want the maximum chance of improving your situation. 

Option 2: Liaise with a Mortgage Broker

In the realm of mortgages, a mortgage broker is equivalent to a lawyer when going to court. After all, both are fighting for your best future with the best equipment available. 

There are three main options that a mortgage broker will attempt to achieve when negotiating with the lender. 

Loan Modification

Much like how lawyers act as an intermediary between plaintiffs and defendants, a mortgage broker acts as the intermediary between you and the mortgage lenders. Using When the Bank Says No as an example, our  experienced brokers know the nuances of the mortgage market. Before even approaching the lender, we already know the best possible angle to pursue. 

As a result, the mortgage broker has a much higher advantage going into any negotiation than a layman would. Some of the benefits that we go for are: 

  • Lower Mortgage Interest – Lowered mortgage interest means a lower mortgage payment per month. This reduction leads to significant savings. Brokers have an insight into which lenders may be open to reducing rates, and how best to negotiate toward that goal. 
  • Extended Loan Durations – Extending the duration or term of your mortgage can lower your monthly payments by extending them over a longer period. By doubling the amount of overall time you’ll be paying your mortgage payments, for example, you essentially cut the amount you’ll have to pay per month in half. 
  • Different Payment Structures – This could mean something as simple as splitting up your monthly payments, such as creating interest only payments. This means your mortgage interest payments would be standalone, whereas the money you borrowed would be paid back in their own monthly mortgage payments. 

Explore Refinancing Options

To refinance means to replace your existing loan with a new one. This is effective at securing better terms. We often find that many people, especially those deep into their mortgage, usually take on mortgages that aren’t as favourable as they could be. 

This is where we come in. The following points are how a mortgage broker can help you: 

  • Access to Multiple Lenders – A huge part of a Mortgage Broker’s job is to create and maintain relationships with lenders for multiple sectors, such as banks, credit unions and other financial institutions. This allows us access to options that laymen couldn’t possibly get access to. 
  • Comparing Rates and Terms – Mortgage brokers understand rates and terms offered by various lenders, as well as how to properly cross reference them to find the best possible avenue forward.

Explore Mortgage Forbearance

Forbearance is an option available specifically for people who are experiencing hardships with paying their mortgage repayments. The following are the ways how mortgage brokers can help you. 

  • Tailoring – Getting a mortgage forbearance is challenging. It requires plausible reasons as to why your payments have stopped, and it requires evidence that payments would resume after mortgage forbearance for a significant amount of time. Mortgage Brokers are skilled in creating applications, and know how to tailor your application to reflect these two things. 
  • Time Restraints – Not only is it time-consuming to create the application for forbearance, but it’s also time-consuming to pursue and negotiate it. Considering it’s a mortgage broker’s job, they have the time in the day to devote to pursuing this course of action. 
  • Understanding – Not only do mortgage brokers understand exactly what the lenders want to see, they also understand all the nuances of the application process, ensuring that no errors or unforeseen fine print make their way onto the final stages of the application

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Conclusion

All in all, we believe the absolute best practice possible when you believe you can no longer make your payments is to contact a mortgage broker. They are skilled professionals whose job it is to protect you in the mortgage market. Contact When the Bank Says No today to find a definitive solution to your lending and housing troubles. 

Can’t Afford Mortgage Payments – FAQs

What happens if I miss a mortgage repayment? 

Missed mortgage payments will put you in mortgage arrears, and can create a host of issues for you to deal with. This is why it’s very important to get out ahead, and then pay your mortgage as soon as possible. Here are some issues that could come about as a result of failing to pay your mortgage payments: 

  • Late Fees – If you miss a mortgage payment, then you can expect late fees to be levied against your account. This will happen after the grace period, which is about 15 days. Late fees are between 4% and 5% of the overdue balance. Failure to pay this fee will result in it being added to your total mortgage balance, as well as being reported to credit bureaus after 30 days. 
  • Credit Rating Impact – If your missed payments beyond a month, it will be reported to your bank. Your failure to pay will exist on your credit record for six years, and impact the score. Credit is supposed to represent budgeting ability more so than anything else, and one of the main factors in information that allows lenders to estimate your repayment abilities, so anything that contributes to bad credit scores should be minimised. Good credit score is a marathon, not a race, and so consistency can overwrite any credit score hits you take.  
  • Default Notice – A default notice is a formal warning. It gives you two weeks to pay the mortgage arrears, otherwise, it will lead to further action. Further action can include court actions or even the next point. 
  • Foreclosure – Foreclosure is usually a last resort, taken when the lender believes there’s simply no other solution. Court proceedings sorting out repossession will then play out, leading to your removal. 


These are the consequences of leaving your mortgage repayments till last minute, and not doing due diligence in putting together a plan to go forward. Remember, if you believe you can’t pay your mortgage repayments, give us a call. We will ensure that the rocky road forward is as smooth as possible, and work so that you come out the other end better than ever. 

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How can I receive other types of Mortgage Support?

The following are some ways in which you can receive mortgage support, however each has their own unique condition.

  • Mortgage Payment Protection Insurance – MPPI is a type of insurance that protects you when you’re incapacitated from illness, injury or redundancy. It begins paying out after a waiting period of one or two months.
  • Support for Mortgage Interest – Support for Mortgage Interest is a scheme that is available to homeowners, or have bought into shared ownership property, and are in receipt of the following government support benefits:
    • Universal credit
    • Pension credit
    • Income support
    • Jobseeker’s allowance
    • Employment and Support Allowance

What is the Mortgage Rescue Scheme?

Mortgage rescue schemes were government initiatives made to support homeowners that were on the verge of property repossession. It involved a government loan, as well as the option to purchase the home and allow you to rent it. Unfortunately, this scheme is no longer available.

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Emma Jones
Emma Jones
Emma began her career in Lloyds Banking Group, first in the unsecured & secured loans department at Halifax and later as a mortgage advisor at Lloyds. During 9 years in these roles and a further 2 years at Yorkshire Building Society, Emma was able to observe the impact of the recession, and how the banks let their customers down by denying loans and mortgages. Wanting to be a driving force for change, she stepped into a market advice role where she has been able to help clients when others couldn’t. Identifying a gap in the mortgage space, Emma went on to establish When the Bank Says No. As a keen property investor, she has been the focus of features in publications including The Sunday Times and This is Money. Emma’s greatest joy is overcoming the low expectations of their customers, many of whom have all but given up on getting a mortgage due. One thing Emma has learned through her own personal struggles is every client must be treated like a human and understood better by advisors and lenders in the industry. “We all have to navigate life events which can ultimately impact your financial status. It shouldn’t mean dreams of homeownership or business growth should have the breaks applied”. Emma and her team’s passion for helping people overcome the challenges they may face when applying for a mortgage have fuelled the success of When the Bank Says No.