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Not Able to Pay Mortgage: How To Deal With Mortgage Arrears

Forgetting to pay a bill can happen to anyone. Most people have also had a reminder at some point. But what if you can’t pay the mortgage and build up mortgage arrears? In that case, it is important that you take action as soon as possible. You can read in this article what happens if you take action and what happens if you don’t take action.

Cause of not being able to pay your mortgage

Not being able to pay your mortgage is annoying. Especially if you can’t do much about it yourself. There are often good reasons why you cannot meet the payment obligation.

For example, because your relationship has ended, you find yourself at home sick or lose your job.

All these situations are annoying but generally temporary. You may find a partner again within a year, you will get better or you will get a new job.

But of course, all these causes can also have a more permanent nature. In that case, it is important to look at the possibilities.

For example, below you can see what you can check first when your relationship ends.


In the event of a breakup, it is important to determine whether someone will continue to live in the house.

If all goes well, something about this will be written in the cohabitation contract or the prenuptial agreement.

Once it has been determined who will continue to live in the house, the bank must do a mortgage check to determine whether you are able to pay the housing costs on your own.

Is it possible for neither of them? Then it is often decided to sell the house.

What steps can you take if you can’t pay the mortgage?

Are you unable to pay the mortgage or are you about to build up arrears and are you looking for solutions?

Below you can see the options that you have, with the associated risks and disadvantages.

This way you can hopefully ensure that no more financial problems arise in time.

1. Contact the bank

The very first step you need to take is to contact the bank where you took out the mortgage.

This is also the most important step you can take. As soon as you take the first step before you have payment arrears, the bank can easily move along and look for solutions.

So don’t do what many people do; not open letters, not answer the phone, and hope it will go away on its own. Because nothing just goes away by itself.

Fortunately, you don’t have to be afraid of the bank right away. 

A bank often only has real problems with you if you have not paid your mortgage for three months in a row without contacting us.

If you make sure that you knock on the door well before that time, the bank is still able to help you.

Bonus tip: According to research by the AFM, good cooperation on your part even ensures that many banks do not charge extra costs for payment arrears. As a result, your debt does not increase anymore. A good reason to contact your bank directly.

2. Agree on the payment arrangement

When you have contacted the bank, you will look for a solution together. Often a payment arrangement is made.

This is an arrangement that determines that you can repay the amount owed in installments.

Suppose you couldn’t pay the mortgage of 800 dollars for two months. In that case, you, therefore, have an extra 1,600 dollars in debt with the bank.

They then tell you that you have to repay this amount within 6 installments, without missing the following installments.

The next month you, therefore, have to pay USD 800 + USD 266 (USD 1,600/6). If you cannot repay the money with a payment arrangement, another arrangement will be made with you.

3. Adjust mortgage

An adjusted arrangement may also result in an adjustment of the mortgage. Suppose you have been paying off for ten years and have another 20 years to go.

The bank can therefore propose that the term of the mortgage be increased to 30 years. In this way, the entire remaining amount of your mortgage is spread over an additional 10 years.

Suppose you still have to pay off 192,000 Dollars with a term of 20 years. That is 800 dollars per month.

If you divide that 192,000 Dollars over 30 years, your monthly amount will suddenly become approximately 533 dollars.

A reduction of 267 dollars per month.

In the end, you pay a little more interest, but the monthly costs go down a lot as a result. And that may be just enough to just pay the mortgage.

just pay the mortgage

Interest break

Another method is to insert an interest rate break. This is when the bank temporarily withholds the levy of interest.

As a result, you pay a lower monthly amount on your mortgage, giving you time to solve your financial problems.

This interest break is of course only temporary and you have to repay the interest to the bank later.

4. Budget Coach / Job Coach

Have you gotten into trouble because you are not good with money, or do you miss the overview of your own finances? In that case, a budget coach can offer a solution.

This is someone who will look with you at your current spending pattern, your income stream and everything that is left of your income.

You can then draw up a budget together with the budget coach that you must adhere to.

This can ensure that you gain enough insight into your own finances and can therefore pay the mortgage again.

Another option is the job coach, who helps you with your job search. Can you no longer pay the mortgage because you are out of work?

The job coach helps you with important information and ensures that you can get back to work as soon as possible to earn money.

5. Debt Counseling

Once you have completed all the steps above, debt counseling may eventually be necessary. This means that you are assisted by debt specialists.

They will then ensure that your finances are managed. You also get pocket money from your own income and you have to set aside as much money as possible to pay off the debts.

This process is often seen as tedious by many people because here you lose control over your own personal life.

Someone who is in debt counseling will therefore always advise you to avoid this process as much as possible.

6. Forced sale

If you build up permanent payment arrears, with no prospect of improvement in the near future, the bank can force you to sell the house. You can do this yourself, where you often receive the most money for the sale.

But sometimes the payment arrears are so high that the bank wants to sell the house immediately to avoid larger payment arrears.

In that case, an auction is held, where your house is sold to the highest bidder.

Less value at an auction

Unfortunately, at these kinds of auctions, there are many people who want to pick up the house for a bargain.

You, therefore, have the chance that the house will be sold for 20% less than the market value.

If your house is 100% financed by the bank, then they will only receive 80% of the entire mortgage with that sale. 

Unfortunately, you still have to pay the remaining 20%, even if you are already in debt at that time.

It is therefore advisable to never let it come to the point where your own home has to be auctioned. If necessary, sell the house yourself if you see that your payment arrears are only going to increase further.

In that case, you have the chance that the increase in value of your house has ensured that you have paid all your payment arrears.

There is also another option to pay that 20% residual debt.


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