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Options available when experiencing financial difficulties

Options available to you

We aim to treat all borrowers with financial difficulties or mortgage arrears in a sympathetic and positive manner.

Please see below details for the terms and conditions applying to each of the options.  If you have any queries in respect of the options then please contact us.

General Terms:

Before entering into an arrangement, a concession or capitalisation of the arrears, we will ask you to complete an Income and Expenditure form in order that we may assess whether we feel you are able to afford the proposed solution.  We may also require you to supply recent payslips/bank statements.

If your financial difficulties are of a permanent nature then we will refer you to a Qualified Mortgage Adviser who will fully review your individual circumstances, either in person or by telephone, and will seek to arrange an affordable long-term payment plan.

We do not make arrears charges providing you keep to any arrangement entered into.  If you do not keep to any arrangement, and do not keep us informed of your circumstances, then we reserve the right to levy charges for arrears letters.

The different options available to you

Full monthly repayments are due from the month following completion, on the date stated on the Offer of Advance.  You may change this payment date to suit your finances so long as payments reach us by the last day of the month. 

If you choose to make your monthly payment later than the 1st of the month you will pay more interest as it is calculated on a daily basis.

  • Direct Debit - we offer three Direct Debit collection dates:  1st, 15th and 27th.
    To make payments by direct debit you will need to complete an instruction, click here to download a direct debit form or telephone 01538 392428 to request one.
     
  • Standing Order - to make payments by standing order, please contact your bank - please ensure that your bank quotes your Leek United Building Society (LUBS) account number (LUBS bank details are given below).
     
  • Online - via our bank, HSBC, quoting our bank sort code 40-05-30 and account number 74578031.  It is essential that you also quote your mortgage account number.  This method enables you to pay at any time of the day.  If your bank is in the 'Faster Payments' scheme, your payment will normally be credited to your mortgage account as at the day your bank accepted the transaction.
  • Debit card - this method is intended to enable you to make quick one-off payments by telephone (01538 392428).
     
  • Internal transfer from a Leek United investment account - please telephone 01538 384151 and ask for a form to complete.
     
  • Cheque - you can either send the cheque to the address below or pay this in at any of our branches or agents.
     
  • Cash - for security reasons it is recommended that cash payments be made only at our local branch offices/agency.

Address:  50 St Edward Street, Leek, Staffordshire.  ST13 5DL

Our bank details:  HSBC, Account number:  74578031.  Sort Code:  40-05-30

If you are unable to pay the arrears in full immediately but are able to increase your repayments, then we will consider entering into an arrangement to clear the arrears over a period, which suits your finances.  Typically this will be over a period of 12 months or less, although we are able to consider a longer period if necessary.

You will need to complete an Income and Expenditure form and consider what surplus income you have before making your proposal.  If having entered into an arrangement you find that you cannot afford the repayments, then please contact us immediately and we will look at the alternative options available to you.

You are at liberty to seek independent advice from a free debt advice agency (click here for list of agencies) before making a proposal.  Please inform us immediately if you are using this option and we will allow 10 working days for you to make and attend an appointment.

We will confirm in writing, within 10 working days, the details of any arrangement for concession entered into.

If your income has temporarily reduced and you wish to make reduced payments, then we will consider entering into a short-term arrangement, typically over a period of 3 months.  We will review your circumstances again at the end of the 3 month period and consider whether to extend this facility.

If your income has permanently reduced or your circumstances dictate that you need to make minimum monthly repayments, we will consider accepting payments of interest only.

When your circumstances return to normal, you will be invited to confirm how you wish the deferred payments of capital to be treated and given a choice of an alternative option to catch up or you may elect to capitalise the shortfall.

If you are already paying by interest only and cannot afford your repayments then you should contact a free debt advice agency (click here for list of agencies) for independent advice.  They may recommend that you seek to sell the property.

The maximum interest concession period is 3 months after which we will review your circumstances again and consider whether it is appropriate to further extend the concession period.

If it is unlikely that your circumstances will improve in the near future, then we will refer you to one of our Qualified Mortgage Advisers to discuss a more long-term solution.

If your income has permanently reduced and you can afford to make payments, although not at the current level, you may wish to consider a term extension (capital and interest loans only).  This will effectively reduce your monthly repayments.  You may be required to speak to one of our Qualified Mortgage Advisers before proceeding with this option.

Extending the mortgage term will result in the mortgage balance reducing at a slower rate and in the long term you will pay back more interest.

The mortgage term must normally not exceed your retirement date unless you have adequate pension income to afford the mortgage repayments in retirement.

A fee is payable for this service but this may be added to the mortgage balance.

A 'payment holiday' will normally only be automatically granted on a loan where the mortgage product provides such a facility and is subject to the terms and conditions of the product.

If you request a 'payment holiday' but are not eligible, then an 'interest only' concession may be considered as an alternative.

If you are not able to afford 'interest only' payments, then we will consider a 'payment holiday' over a period of 1 or 2 months, subject to a review of your circumstances at the end of this period or, if earlier, when your income returns to normal.

If it becomes evident that the reduction in your income is long-term, then you will be referred to one of our Qualified Mortgage Advisers or to a free debt advice agency (click here for list of agencies) to seek a long-term solution.

If you are able to maintain standard mortgage repayments but are not in a financial position to discharge any outstanding arrears or shortfall in payments, then providing future payments are made within the month that they fall due, for a period of 6 months, we will consider capitalising the arrears/shortfall.

Under this option the arrears/shortfall will be added to your loan to be repaid back over the remaining term of the mortgage.  Interest will accrue on the total balance outstanding on the mortgage, including the arrears/shortfall at the standard rate for the account.  The monthly repayments will be recalculated over the remaining term of the loan.

This option may be combined with extending the mortgage term if your circumstances dictate that you need to maintain your repayments at the same level.

Arrears will normally only be capitalised a maximum of 3 times during the life of a mortgage after which you will be referred to a Qualified Mortgage Adviser to seek a more permanent solution.

If there appears to be no long-term solution to your financial problems, then you may need to consider selling your property to repay the mortgage.

We will seek to help you remain in your home whilst you attempt to sell the property by accepting reduced or deferred payments, according to your individual financial circumstances and the past conduct of the account.

The use of this option is subject to an initial deferred payment period of 3 months and thereafter a monthly review.  The loan to value ratio (LTV) of your property must normally not exceed 75% at any time during the concession (if the LTV exceeds 75%, then, as an alternative, you may be asked to make 'interest only' payments).

You will need to demonstrate that you are taking all reasonable steps to actively market the property by providing within a period of 10 working days:-

  • Details of the Estate Agent and Conveyancer instructed in the sale, together with an authority to contact these bodies for information regarding the progress of the sale and the instructions received from you.
  • A copy of the particulars of sale and the Home Information Pack.
  • Where relevant, details of purchase offers received.

Before proceeding with this option you are recommended to contact a free debt advice agency (click here for list of agencies) to explore any other options.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE