Preventing Mortgage Arrears and Bank Repossessions

Preventing mortgage arrears

Preventing mortgage arrears and the subsequent risk of bank repossession requires proactive financial management and seeking appropriate assistance. These include budgeting and financial planning, seeking professional financial advice, exploring alternatives to repossession, and utilizing legal assistance and support.

1. Budgeting and Financial Planning

Effective budgeting and financial planning are essential to avoid a missed mortgage payment and preventing arrears.

Assessing Income and Expenses

Begin by evaluating your income sources and determining your total monthly expenses, including mortgage repayments, utilities, groceries, and other essential costs. Understanding your financial position will provide a clear picture of your ability to meet your mortgage obligations.

Creating a Realistic Budget

One of the most effective mortgage payment strategies is to develop a detailed budget that allocates funds for mortgage payments and essential expenses while considering your income level. Identify areas where you can reduce discretionary spending to free up more resources for mortgage payments.

Reducing Unnecessary Spending

Review your spending habits and identify areas where you can cut back on non-essential expenses. This may include dining out less frequently, cancelling unused subscriptions, or finding more affordable alternatives for certain services.

2. Seeking Professional Financial Advice

Professional financial advice can provide valuable insights and guidance in managing mortgage arrears.

Mortgage Advisors and Financial Planners

Consult with mortgage advisors or financial planners who can assess your financial situation, provide tailored advice, and suggest strategies to avoid arrears. They can help you explore refinancing options, negotiate with lenders, or identify potential government assistance programs to avoid missed mortgage payments.

Debt Management Experts

If you are struggling with multiple debts, consider seeking assistance from debt management experts. They can help consolidate debts, negotiate with creditors, and develop a repayment plan that aligns with your financial capacity.

Housing Counsellors and Non-profit Organizations

Housing counsellors and non-profit organizations specialize in providing support to individuals facing mortgage difficulties. They can offer guidance on budgeting, negotiation with lenders, and accessing resources for mortgage assistance.

3. Legal Assistance and Support

Understanding your legal rights and seeking appropriate legal assistance can provide crucial support in preventing repossession.

Understanding Legal Rights and Options

Educate yourself on your legal rights and the options available to you when facing mortgage arrears. Familiarize yourself with relevant laws and regulations to make informed decisions about your financial situation.

Engaging Legal Representation

If necessary, engage the services of a legal professional experienced in mortgage and property law. They can provide advice, represent your interests, and help negotiate with lenders to prevent repossession.

Explore government assistance programs

Research any government programs or initiatives designed to assist homeowners facing mortgage difficulties. These programs can provide temporary relief, loan modification options, or refinancing opportunities. Examples include Breathing Space which is a UK government scheme that gives people temporary protection from most types of debt collection while they take action to get on top of their debts. It can give you up to 60 days’ respite from interest, fees, and court action if you’re at risk of having your home repossessed.

Contact national charities

They can provide you with advice and community. Check out Citizens Advice Bureau, Step Change, and Shelter, and National Debt Line.

4. Exploring Alternatives to Repossession

When faced with mortgage arrears and serious threats of repossession, exploring alternatives to house repossession can help safeguard your home and financial stability.

Mortgage Modification and Refinancing

Contact your lender to discuss mortgage modification or refinancing options. This may involve extending the loan term, adjusting interest rates, or changing payment structures to make the mortgage more affordable.

Loan Restructuring and Payment Plans

Engage with your lender to explore loan restructuring options, such as repayment plans that spread arrears over an extended period. Negotiating affordable repayment arrangements can help you catch up on missed payments.

Selling the Property or Downsizing

In situations where the mortgage arrears are unmanageable, consider selling the property or downsizing to a more affordable home. This can help you settle the outstanding debt and prevent repossession.


This is a temporary solution for homeowners who are having trouble making mortgage payments for people facing temporary hardship or loss of income It temporarily puts your mortgage on hold, and the payments are suspended or reduced for a set period. However, forbearance does not erase the amount you owe on your mortgage, and you will have to repay any missed or reduced payments. During the COVID-19 pandemic, banks offered forbearance and the rules are still in place for those struggling to make payments. It is important to speak to your lender and understanding the potential impact on your credit score before making any decisions.

New Dawn Residential

We understand that facing difficult circumstances with your property can be stressful and overwhelming. That’s why, at New Dawn Residential, we specialise in ethically purchasing distressed properties and providing guidance and support to our clients free of charge. We encourage you to speak with us directly so we can explore your options together. Suppose we determine together that us purchasing your property is the best course of action. In that case, we will take a caring and considerate approach throughout the process, namely:

  • We will listen carefully to your situation and understand your needs, so we can provide the support you need to make the best decision for you and your family.
  • If needed we will also engage a private debt advisory company to provide expert guidance and support, so you can feel confident and reassured throughout the process
  • If suitable, we may offer to clear any outstanding arrears to relieve you financially.
  • We may be able to provide you with extra cash allowing you to meet your needs and make a fresh start.

We are committed to ensuring our clients receive the empathy, support, and guidance they need to make informed decisions about their property. If you have any questions or concerns, please don’t hesitate to reach out to us. We’re here to help. Please note that currently, we are only purchasing properties in the London area, and not all properties meet our profile. Feel free to reach out and contact us at 02080595003 or at