Help with Payment Difficulties
We have a mutual interest in ensuring our customers manage their buy-to-let properties effectively. So if you are behind with your payments or are worried that you may struggle in the future, please contact us. The sooner you call the better – as speaking to us earlier on means there are more ways we can potentially help.
How We Can Help
What we will do:
- Contact you as soon as possible to speak directly with you about your situation
- Ask questions to understand the extent of your financial difficulties in relation to your investment property
- Discuss various options with you, considering your individual circumstances
- Give you reasonable time to pay back the amounts that have become due, before we take enforcement action
- Refer you to sources of free, independent & impartial advice, which could be helpful, especially if you have debts with other providers
What we may do:
- Ask you to provide income and expenditure information or details about your property investment plans
- Determine a new payment plan that reflects your current circumstances (subject to assessment) and review this with you in the future
- Reach agreement with you to change the way you make your payments, or revise the date on which your payments are due
- Reach agreement with you to make changes to your mortgage (subject to assessment) such as extending the term of your mortgage to reduce your monthly payments, or temporarily converting your account to an interest-only basis (if not already) to reduce your contractual payment
If we agree any arrangement like this with you, we’ll explain how everything will work, give you time to consider the option and seek independent advice, then confirm things in writing to you.
If we cannot offer you any of these options, we will explain why. We may also agree to you selling one or more of your buy-to-let properties, depending on your circumstances.
What You Can Do to Help
- Tell us as soon as possible if you’re having problems repaying your mortgage or think that you might experience problems shortly
- Respond promptly to our calls and letters
- Seek free, independent and impartial advice, which could be helpful, especially if you have debts with other providers
- Make sure you keep any other people paying the mortgage, and anyone guaranteeing the mortgage, up to date with what is happening
- If you have an insurance policy such as rental income protection or cover for void periods, check whether it can help with your mortgage payments
- Keep to any payment plan we may agree with you
- Tell us if you move to a new address and provide us with an up to date telephone number to make it easier to contact you
- Contact us promptly to update us if your situation changes
Free, Independent and Impartial Advice
You may want to discuss your situation with an impartial adviser, especially if you have debts with other providers. The details below may help you find the advice you need:
- Business Debtline – 0800 197 6026 www.bdl.org.uk
- The Money Advice Service – 0800 138 7777 www.moneyadviceservice.org.uk
- National Debtline – 0808 808 4000 www.nationaldebtline.co.uk
- Step Change Debt Charity – 0800 138 1111 www.stepchange.org
- Citizens Advice Bureau – www.citizensadvice.org.uk (England & Wales) www.cas.org.uk (Scotland)
Costs and Charges
If you fall into arrears with your mortgage repayments, we may charge you a reasonable administration fee and/or legal costs. We will not apply such charges if you have made, and keep to, an arrangement with us.
Please refer to the section on Arrears and Repossession fees in our Tariff of Charges document.
If we cannot reach an agreement to help you clear your arrears, we may have to initiate legal proceedings to repossess your property. However, we will only do this once other potential options have been considered and rejected.
If court proceedings are issued, we strongly recommend that you seek immediate independent legal advice and attend any court proceedings.
When a buy-to-let mortgage is in arrears, as per the terms and conditions of these loans, we may appoint a Law of Property Act (LPA) Receiver to manage the property on your behalf. This may avoid the need for us to initiate further legal proceedings.
The LPA Receiver acts as your agent, but has a primary duty to us as lender to service the mortgage in the correct manner, through collecting rent, managing and potentially selling the property. They also have a duty to any other parties who have a vested interest in the property, such as the owner, the tenant, other charge holders and freeholders.
If Your Property is Repossessed
- We will sell it for the best price we can achieve within a reasonable amount of time
- We will give you sufficient time to obtain any possessions stored at the property
- We will use the money raised from selling a particular property to pay all loans and charges secured against it
- If there is any money left over, we will use this to pay off any other second charges held on the property, or use this to set off against any other mortgages you have with us. If there is still money left over, then the remainder will be transferred to you
- If there is not enough money from the sale to pay off the mortgage balance, we will contact you shortly afterwards to discuss the outstanding ‘shortfall debt’
- We will take account of your monthly income and outgoings to arrange a suitable payment plan for this shortfall debt with you
If you are struggling to maintain your mortgage payments, you may think there is no way out and wish to hand over the property keys to us. If you do this, you remain liable for any outstanding debt on your mortgage. Before taking such action, we recommend that you discuss this with us first, as we may be able to help you resolve the situation.