What Are Mortgage Arrears?

Mortgage arrears happen when you miss or are late on home loan payments. This includes payments you haven’t made or paid after the due date. 

How Much Can You Borrow?

If you’ve missed payments, you can refinance up to 90% of the property value with special lenders. If you’ve missed up to two payments, you can refinance up to 80%. And if legal action is taken, you can refinance up to 75%. 

Can You Get Approved?

Yes, even with a bad credit history, you can get approved, but the interest rate might be higher. 

Why Do People Miss Payments?

People fall behind on payments because of unexpected things like being sick, losing a job, or facing other unplanned costs. 

Missed vs. Late Payments: 

• Missed Payments: You didn’t pay, and it’s recorded as a big problem if you’re over 60 days late. 
• Late Payments: You paid, but it was late. If you’re a little late a few times, it’s not as bad, and it stays on your record for up to 2 years. 

Refinancing Possibilities: You can refinance even if you’ve missed payments, but the interest might be higher. Once you show you can pay on time, you can switch to a better lender. 

What’s the Interest Rate for Missed Payments?

If you’re late, the lender might charge you extra interest on the overdue amount. That’s why paying on time is super important. 

Good and Not-So-Good Sides of Refinancing:  

Good Things: 

• You can switch to a type of loan that helps with your money. 
• You won’t lose your home. 
• You can combine your debts to make it easier to pay. 
• You can talk to the lender about changing your loan details. 

Not-So-Good Things: 

• Your interest rate might be higher. 
• You might need to pay extra fees when you switch. 
• If you make your loan last longer to pay less each time, you end up paying more in total. 

What Banks Do Before Repossession: Before they take your home, banks usually talk to you, send notices, and give you a chance to fix things. 

When Do Banks Take Action?

Banks might start acting if you’re often late on payments. If you’ve missed 2 payments with a high loan amount or 3 with a lower amount, they might start talking about taking your home. 

Getting Help and Refinancing: If you’re having trouble, talk to special lenders or experts who know about loans. They can help you refinance or combine debts. 

Conclusion: If you’re struggling with mortgage payments, it’s important to understand what’s happening. Getting help, talking to your lender, and looking for better options can make a big difference.