The financial ombudsman claims millions of UK home owners are struggling with mortgage debt - and failing to seek help.
The service saw more than 13,600 complaints in the last year, but the ombudsman says many have little chance of success.
Too lateIn a nutshell, too many home owners are leaving it too late to get help says the ombudsman. Last year 13,659 people – the highest number recorded – contacted the ombudsman for help with a mortgage or secured loan. Yet a third of those were into arrears before they contacted a lender.
"Of the remaining cases," says the ombudsman, "it became clear that a large number of people struggling to make ends meet felt unable to say that they were facing significant financial problems – or were concerned about the impact of telling their lender of their situation."
'Unrealistic'Looking at the tally of complaints, only a third of all mortgage complaints (30%) were upheld. But on many occasions, some homeowners were seeking "unrealistic" outcomes – like suspending payments or interest indefinitely, or writing off debt says the ombudsman.
Significantly tougher mortgage checks, in the long term, may cut the amount of complaints. However complaints may rise again when - if - the Bank of England hikes interest rates, making lending more expensive, especially for newer home owners with large loan-to-value ratios and less disposable spending muscle.
Act in timeJust what can be done before things get out of hand? Shelter advises asking your lender to extend your mortgage period and adding your arrears to the total sum borrowed. "Your monthly repayments would increase," it says, "but you won't need to find a huge chunk of money upfront."
If the drop in income is temporary and you can pay your monthly repayments but not arrears, you can ask your lender to defer arrears payments for a certain time.
Or, consider an interest-only mortgage says Shelter, though be aware that the long-term trend for rates is now upward, rather than flat or down.
The National Debtline is an excellent resource and has a number of fact sheets, not just for mortgage debt but also on bankruptcy, Debt Relief Orders and ordinary household budgeting.