Stop Repossession – If you, for whatever reason, manage to miss three mortgage payments your lenders are within their rights to initiate repossession proceedings against your property. It is also a very distressing experience to consider being physically removed from your own home, not to mention the financial loss you will suffer.
When a property is repossessed by a bank you have no guarantee of getting any money over and above your mortgage. If you add up all the legal costs, court costs, bailiff costs, interest upon interest payments and charges, this amounts to a lot of money that you could potentially lose. On top of this, bank’s choose to sell houses that are repossessed quickly at an auction or by similar public notice which means your property will never achieve an open market value or anywhere near it. You will then lose the equity in your home you have worked so hard for.
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What is the term repossession?
Repossession is a term used to describe when an actual owner takes back from the borrower an object that was rented or leased, or was borrowed, either with or without compensation, or when a lienholder takes possession of an item from its registered owner that was used as collateral for a loan.
Why you can experience home mortgage repossessions?
This may happen for variety of reasons– failing to meet mortgage arrears, divorcing or separating, constrained by secured or unsecured debt. Taking positive action to stop repossession is what this website is all about
Do you want to stop repossession?
Stopping repossession is possible in most cases, no matter what stage your repossession case has reached. Repossession can be stressful and upsetting – don’t worry, we are here to help you stop repossession as quickly and effectively as possible.
Repossession Process Overview
Borrowers that fail to make mortgage payments or repayments on any loan secured on their property in time run the risk of falling into “arrears”. If the situation continues to escalate then they could be in danger of having their home repossessed.
- Missed Payments
- Solicitors Notice
- Proceedings Begin
- Court Hearing
- Eviction Notice
Ways to prevent repossession
- Contact your lender about arrears
Contact your lender if you have mortgage arrears. You may be able to come to an agreement.
- Write a holding letter to your lender as soon as possible.
Your letter should: explain why you’re in arrears, say that you’re making every effort to clear the arrears, say that you’ll write to them again soon with a proposal for dealing with the arrears. This may give you time to speak to an adviser and get help. You’ll need to make a realistic proposal for paying off your arrears. You or your adviser must write to your lender setting out your proposal.
- Check your lender has followed the rules– if you have mortgage arrears, your lender must follow repossession rules for mortgage lenders.
- Look at your finances- Your mortgage is a priority debt. You should pay your mortgage before other non-priority bills such as credit cards, phone bills, TV subscriptions. Look at your financial situation. Try to work out how you can pay your arrears and keep up with future mortgage payments.
- Sell your home yourself– You could decide to sell your home if you can’t pay off your arrears or keep up with your mortgage repayments. It may be better for you to sell your property yourself to get the best possible price.
Several Quick Strategies to Stop the Process of Repossession
Repossession occurs more often than you think. It can happen to anybody. It can happen to you and it can happen at any given moment. Therefore, it’s important to know what to do, if you’re in the process of having your property repossessed. Let’s answer the most imperative question of the day, first, before we move onto exit strategies.
When is repossession triggered? Contrary to popular fears, missing one mortgage payment isn’t fatal in the large scale of things, but miss payments for 2-3 consecutive months and you have your lenders looking to repossess. Naturally, our first advice is to next skip payments for more than one month. Going through repossession is often traumatic, stressful and you’ll have your name added to the Possession Register – and that will affect your credit score for a long time.
Worse comes to worst, your lenders have triggered repossession. What do you do now?
Use Savings to Pay Mortgage off in Full: You can pay off your mortgage in full ONLY, if you have all the funds to pay ready – this means tapping into savings or selling other assets to raise the money. This is the easiest, but in most cases least available option, because if you’re well off to have savings, then you’d be in the position to pay your mortgage in the first place.
If Not Feasible, Pay Off as Much as You’re Able: If your financial difficulties are short-term, an easy way for you to stop repossession is to continue paying your mortgage and any secured loan as much as possible. Every bit helps to delay the situation until you’re in a better shape to keep up with your payments.
Sell Your Home to Avoid Repossession: Although counterintuitive, selling your home fast is a solid means to stop repossession, avoid bad credit and avoid being included in that registry. Use a property buyer and you’ll even avoid seller’s costs, bring the costs to do this procedure to 0 – an affordable and efficient way to solve this. And furthermore, with your mortgage cleared, if there’s any equity left, you receive it as a cash lump sum! The drawback is that you do have to find another place to live.
Sell Your Home, But Keep Living in It: If you’re quite happy where you are and you don’t intend on moving, then you can sell your house and then rent it back, so instead of paying your mortgage, you’ll be paying a rent price to live in your home. This only works with a property buyer that has received their FSA approval. You do away with a mortgage and again, are paid a cash lump sum for equity.
At the end, we’d like to tell you one thing NOT to do when facing repossession – giving back your property voluntarily to the bank. Voluntary Surrender will only result in an auction from the bank at a price that’s way below actual market value. Not to mention, you’ll get saddled with the lenders cost for the entire auctioning process.