BSA: New advice for building society borrowers facing difficulties
In today’s climate, lack of job security is increasingly on people’s minds. Losing your job can lead to problems meeting mortgage repayments so, with this in mind, the Building Societies Association (BSA) and the Money Advice Trust (MAT) have produced a new booklet giving straightforward advice on what to do if you can’t pay your mortgage.
Despite what some people believe, telling your building society you might have problems paying your mortgage does NOT mean they will start to repossess your home.
The booklet – Can’t Pay Your Mortgage? – covers information on the six steps you must take to ensure you don’t lose your home, what happens when you contact a building society, the role of money advisers; and a section on where to turn for further help and advice. It also dismisses some of the “urban myths” associated with having mortgage repayment difficulties.
The booklet is available from the BSA website and many building societies. The Money Advice Trust is also circulating the booklet amongst its advisers.
Commenting on the launch of the booklet, Paul Broadhead, Head of Mortgage Policy at the BSA said:
“Struggling borrowers should contact their building society as soon as possible. If they read this booklet, the guidance contained in it will alleviate any fears they have about their home being immediately repossessed and give them all the information they need to contact their building society with confidence to discuss their mortgage arrears.”
Joanna Elson, Chief Executive of the Money Advice Trust said:
“During these difficult times it is vital that people seek free independent debt advice if they are concerned they may not be able to keep up payments on their home. A free, independent, money adviser can help you look at all options including accessing relevant government support. We are pleased to be working with the BSA to ensure people in debt get the help and support they need.”
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CONTACT: Jayne Chichester
DIRECT LINE: 020 7520 5926
EMAIL: jayne.chichester@bsa.org.uk
Notes to editors
1. Balances in arrears at building societies are running at just 0.80% of outstanding mortgage balances. This compares to industry wide figures of 2.72%.
2. The “urban myths” included in the booklet are:
The only way I can pay off my arrears is to pay off the whole amount I owe Your lender will offer you a range of options to repay your arrears, and you won’t be expected to do it in one go.
I could take a loan out to pay off my arrears Many companies claim to be able to consolidate debts or to offer low payment loans to overcome arrears problems. However, the interest charged on such arrangements can often be horrendously high, and you should always take independent advice before thinking about taking out a new loan.
I could send my keys to the lender and walk away?
Doing this does not end the mortgage. In such a situation you would remain liable for any money that you owed your society that it was unable to make from the sale of the property. Remember that you will need somewhere to live and your local authority may view you as having made yourself voluntarily homeless and so decide you are ineligible for help.
3. The booklet can be found at: http://www.bsa.org.uk/publications/industrypublications/cantpay.pdf
4. The Building Societies Association (BSA) represents all 53 building societies in the United Kingdom. Building societies have total assets of £395 billion and, together with their subsidiaries, hold residential mortgages of £250 billion, more than 20% of the total outstanding in the UK. Societies hold over £235 billion of retail deposits, accounting for more than 20% of all such deposits in the UK. Building societies also account for about 37% of all cash ISA balances. Building societies employ over 51,500 full and part-time staff and operate through more than 2,000 branches.
5. Photographs of Paul Broadhead and Joanna Elson are available from the BSA press office.
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