Mortgage Full and Final Settlement Offer Letter
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
Are you needing to write a Mortgage Full and Final Settlement Offer Letter? You are in the right place.
Each month, more than 170,000 people visit our website seeking guidance on solving debt problems. We can help you learn how to write a helpful letter when facing a mortgage shortfall.
In this easy-to-understand article, we’ll talk about:
- What a mortgage shortfall debt is.
- The meaning of a full and final settlement.
- How to make a fair offer for your full and final settlement.
- Important things to remember before making a settlement offer.
- How to legally write off debt.
We know that dealing with debt can be hard. That’s why we’ve created a letter template for you to use. This will help make the process simpler.
Letter Template
To Whom It May Concern
Regarding Case #: [your case number]* (required)
I am writing about the money which you are claiming I owe on the above account.
I can confirm that I am unable to offer to pay in full what I owe.
[include a paragraph explaining your circumstances and details of your financial situation that you want the creditor to take into account.]* (required)
However, I can raise £[put the amount which you can afford to pay.]*. (required) and I want to offer this as an ex-gratia payment in full and final settlement of the account.
This offer is made on the clear understanding that, if accepted, neither you nor any associate company will take any further action to enforce or pursue this debt in any way whatsoever and that I will be released from any further liability.
I also request that, if accepted, you will make an entry on my credit reference agency file relating to the above account as ‘satisfied’ in full.
Payment can be made within [put the number of days or weeks within which you will pay.]* (required) of receiving your written agreement to this offer. Please indicate your preferred method of payment.
I look forward to hearing from you.
Yours sincerely
Downloadable Resource
The download links below take you to a Google document template where you can make a copy or save in any document format you like. Note, you may have to login to your Google account.
Download – Single (for one person)
Download – Joint (for couples)
What is a mortgage shortfall debt?
In a nutshell, a mortgage shortfall is when a mortgage lender repossesses your home because you have not kept up with repayments. The lender then sells the property to recover the money they lent to you to buy it in the first place. If they sell the property for less than is left on the mortgage, the difference is the mortgage shortfall. This is then a debt that can be passed back to you.
What is a full and final settlement?
A full and final settlement is when you and your lender agree on a figure to pay off the debt. The offer will be below the total value of the debt, meaning the lender writes off part of the debt and will not chase you for the money you didn’t pay in the future. It’s a way to pay off your debt without paying back everything.
Our free letter template will help you make a full and final settlement offer to a mortgage lender. Download it now to make your proposal.
» TAKE ACTION NOW: Fill out the short debt form
Is a full and final settlement legally binding?
If you have agreed in writing a full and final settlement offer and then make the full payment of that offer, the lender will not be legally allowed to chase you for more money later. Always make sure you have the full and final settlement offer in writing from the lender as well, and read over any terms they may include.
How a debt solution could help
Some debt solutions can:
- Stop nasty calls from creditors
- Freeze interest and charges
- Reduce your monthly payments
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
| Monthly income | £2,504 |
| Monthly expenses | £2,345 |
| Total debt | £32,049 |
Monthly debt repayments
| Before | £587 |
| After | £158 |
£429 reduction in monthly payments
If you want to learn what debt solutions are available to you, click the button below to get started.
How much should I offer as a full and final settlement?
There is no magic figure that all mortgage lenders will accept as a full and final settlement. You should probably not offer lower than 75%, but always explain the details of why you are making your offer. If it is unlikely that the lender will get more money from you by not accepting your offer, make that clear to improve your chances of your offer being accepted.
Before you make a settlement offer…
Before you make a settlement offer for mortgage shortfall debt, make sure that the debt is still enforceable. The Limitations Act states that the capital for the mortgage shortfall must be collected within 12 years or never chased again. And any interest should be recovered within six years.
Moreover, the mortgage provider must tell you about the debt within six years of the property sale, as stated by the FCA.
We have an alternative letter template if you want to tell a lender that time has run out.
