How should advisors help people in arrears?

December 22, 2023 by Brendan O'Neill

Mortgage Advisors

Mortgage holders who have fallen behind in their payments is something that advisors will be encountering more frequently now. Research has shown a rise of 7% in the number of people in arrears, due to interest rate rises. So how should advisors approach this situation?

To begin with, an approach that is tailored to the particular circumstances of each individual will be required. Obviously, the lessons of your CeMAP mortgage advisor course should be applied when relevant, but looking at the person’s financial situation in a holistic way will be more useful than trying to simply apply standard one-size-fits-all solutions.

That may include recommending services that offer financial counselling, as well as highlighting the schemes for people in arrears that are being supported by the Government. Interest holidays are one of those, but they should only be advised as a last resort.

If you happen to have the Financial Conduct Authority (FCA) permissions needed to legally negotiate with the institution a client is behind on repayments to, this is another step that can be taken. It is one that should be entered into at the earliest possible date though, before the arrears involved begin to really spiral out of control.

Working out a plan that meets the needs of both the client and the lender is likely to be about creating a list of debt priorities. There are some that will need to be paid off more urgently than others, and that is what any negotiations with the lender will be about establishing.