In Q4 of 2019 1,330 homeowner mortgaged properties were repossessed. Furthermore, 70,880 homeowner mortgages were in arrears of 2.5% or more during over the same period.
Owning your own home can be an exciting milestone in life and your monthly mortgage repayments leave your account like clockwork, without issue. However, life is unpredictable and serious illness and redundancy are just two of the reasons why people fall into mortgage arrears. If you aren’t earning an income it can be difficult to pay your mortgage.
What is repossession?
When a property is repossessed the mortgage lender takes ownership of the house. A house is only ever repossessed when an individual has fallen behind on mortgage repayments and hasn’t set up an alternative plan with their mortgage lender.
If you are in a position where you have missed a monthly mortgage repayment and do not feel like you can keep up with your payment schedule contact your lender and also seek legal advice. Your home will be at risk as your lender will need to repossess the property to cover the costs.
Repossession and mortgage providers
Mortgage providers aren’t the bad guys; if you miss a mortgage repayment get in touch with them as soon as possible. Providers appreciate honesty and will always work with their customers to formulate a plan – repossession is always a last resort for them. Typically, if one payment is missed a phone call to your lender and an extended payment date will be granted without ramifications as they understand life isn’t always straight forward.
Communication with your mortgage lender is key; they cannot help you get out of arrears or offer you solutions if they aren’t aware. Failure to do so will likely result in a formal demand for full arrears payment as well as any other charges via a third-party debt collection company.
How to avoid repossession
Honesty is the best policy the minute you fall behind with your mortgage repayments. Before you contact your lender it will help if you make an offer of what you could realistically pay and have a budget and plan in place; this will show you are responsible and want to fulfil your mortgage repayments.
Your mortgage lender may suggest:
- Taking a mortgage holiday
- Adding your arrears to your mortgage
- Selling an endowment policy
- Changing to an interest-only mortgage
Steps you could take of your own accord include:
- Rent out your home
- Take in a lodger
- Sell your house
Stop house repossession
Even if you communicate with your mortgage lender there are sadly some scenarios where financial struggles lead to you not being able to continue paying your mortgage for the foreseeable future. You may want to avoid the repossession process by selling your home and freeing up some cash; this can give you much needed breathing space.
Repossession can have a huge impact on your financial health in the future. A County Court Judgement will be taken out against you and it will appear on your credit record for six years; affecting your ability to get another mortgage, open a bank account, get a credit card or take out car insurance. Avoiding repossession and rectifying mortgage arrears on your own terms is the best solution.
If you want to sell your home with an online estate agent SOLD.CO.UK can help, having homes sold in 30 days or less. Selling your home with us is completely free, and we will cover your legal costs too. To find out how it works, book a free valuation today or call our friendly team of experts on 0800 566 8490 for advice on how we can help you avoid repossession.