Home owners - homeless prevention

If you are having trouble making your mortgage payment, there are options available to help you.

The earlier you get advice, the more chance you have of finding a solution to suit you and your mortgage lender.

Falling behind on mortgage payments

If you fall behind on your mortgage payments don't ignore it. Contact the lender to explain your situation as soon as you have a problem or receive letters from them.

Most major lenders will not to take any possession action within three months of you falling into arrears. This gives you time to take advice, consider your options and take action.

For general help and support read advice mortgage arrears (PDF) [264KB] .

The sooner you act, the more options you will have.

Help and support options

The following options may help you meet your mortgage payments:

Be smarter with your spending

Look at what you are spending your money on and how you can reduce that amount.
Ask yourself:

• Can I cut back on my spending without having to struggle? Can I get a better deal on my mortgage? : Am I behind on any other loans secured against my home?
• Can I change the way I am paying my other debts that are not a priority, by talking to the people I owe money to?
• Would an agreed 'payment holiday' or changing to 'interest only' payments help me pay my mortgage?
• Is my home worth more or less than the amount I borrowed to buy it?
• Is my loan regulated by the Consumer Credit Act and can I take action to reduce payments or extend the term of the mortgage in the short-term? Do I have mortgage payment protection insurance (MPPI) that I can make a claim on?

For more self help advice see 'getting out of debt' from the downloads section.

Check if you're entitled to financial help

To find out whether you are entitled to help with your housing costs and any other benefits see welfare benefits and debt advice services.

Other points to consider:

• You may be entitled to help with your mortgage interest payments from DWP. For more information visit GOV.UK - Support for Mortgage Interest
• Check if you have a mortgage protection payment policy that you can claim on

Consider renting a room

The rent a room scheme provides a tax free allowance of up to £4,250 per year for people letting out a room in their home to a lodger.

For more information visit GOV.UK - Rent a Room.

Suggest a repayment plan to your lender

If you are still struggling with payments, contact your mortgage lender to suggest a repayment plan for the arrears.

It is important to continue to make payments you can afford to show that you are willing to pay.
It is essential to pay as much and you can afford to stop your arrears from rising too quickly, but don't commit yourself to a repayment plan that you won't be able to stick to.

Repayment plan options

Below are a list of repayment options. The best solution will depend on your circumstances and the type of mortgage you have.

• Increase the term of your mortgage to spread the cost of your loan to reduce the payments.
• With the agreement of the lender make reduced payments or get a repayment holiday in the short term.
• Add the debt to the mortgage to clear the arrears but with a revised repayment schedule.
• Switch to a different mortgage taking into account any costs of switching and what the repayments will be after any initial interest rate offer has expired.

Court action and repossession

You can only be evicted if the court makes an order telling you to leave.

When the lender applies to court for possession, the court will write to you to tell you when the hearing will be. Before the hearing, it is very important to get advice.

At Preston County Court there is a Court desk service on Tuesday to Thursday each week where advisors are usually available to provide assistance in repossession cases. For more information visit GOV.UK - Preston Combined Court Centre.

It is essential that you attend court so that you can explain your situation to the judge. It may be possible to stop the proceedings at any stage, so it is important to seek advice urgently.

Pre-action protocol on mortgage arrears

Lenders are required to follow a pre-action protocol, so that repossession is only used as a last resort.

The protocol sets out steps lenders should have taken, before taking possession action in the courts.

The steps offer you the chance to seek advice and take appropriate action to resolve the situation.

Lenders who have not followed the protocol risk seeing their court action stopped until the protocol is followed.

For more information see pre action protocol - mortgage arrears (PDF) [26KB] .

Repossessions prevention fund

The fund is available to anyone threatened with homelessness either through repossession or eviction. For example, it could be used to clear mortgage or second charge arrears where this would prevent repossession.

The maximum loan is £3,000 and is conditional on the household seeking money advice with Preston City Council's Welfare Benefits and Debt Advice Service, Citizen's Advice Bureau or other money advice agencies that are used by the council. You must arrange an appointment with your chosen service to find out if you are eligible.

Loans are not available unless the home owner or tenant has acted on money advice and is able to meet any existing or newly agreed monthly repayments.

Finding another home

If you are unable to stay in your existing property due to financial or personal issues, you may consider the following:

• Selling and buying a smaller more affordable property (The pre action protocol requires lenders to postpone possession action if you are taking reasonable steps to sell the property)
•  Renting an affordable private property or through a housing association.

Homeless eligibility assessment

If you decide to give up your property and feel at risk of becoming homeless due to personal circumstances, we may be able to help you find accommodation through our Homelessness advice and assistance.

Make a homeless application form

Please complete the homeless application form if you have a housing problem, homeless or threatened with homelessness.

Please provide details of your situation and we will try to answer your enquiry however due to the complex nature of many housing problems we may contact you to ask further information from you in order to provide a detailed answer.

This service is free and confidential and available only to persons residing in the Preston City Council area.

Make a homeless application form