House repossessions: What you need to know
What is repossession?
Your bank or mortgage lender will have a 1st charge stake on your home. If you have found yourself unable to pay off your mortgage arrears and fall further into debt, This is when your lender can apply to the court for a possession order. This is usually the last thing your lender will do to recover the money you owe.
Before a lender can start a repossession order on your property they must abide by the following steps for it to legally stand up in court.
Make clear your outstanding amount owed.
Look into any payment plans you have suggested.
Respond within 10 days to any payment plans you have suggested with reasons.
Also, offer you a grace period to look into any payment plans they have suggested.
Must provide you with 15 days written notice before any court proceeding started.
Give you the correct date and time of any repossession hearings.
How to prevent repossession
Before it goes to court it is important to contact your lender and explain A. How much money you owe outstanding B. an alternative payment solution which you can afford and will see you clear off any outstanding balance without affecting your priority bills etc.. Mortgage lenders love communication even if you do not think what you have to tell them is important it is always worth picking up the phone and keeping them in the loop.
There are also some free mortgage rescue services which you could qualify for.
Visit the below link to for more information on mortgage rescue services in England.
Looking into loans which may be available to you to clear your mortgage arrears is also an option. However, if you are in a position with no income or don't think you will be able to pay any additional costs than what you are currently paying now, then we would advise against any further credit at this point.
Work out a feasible plan
Work out your monthly budget Look through your previous month's income and expenses so you can get a reliable idea of your typical disposable income and decide where you can afford to make cutbacks or if there are any areas in which you are overspending?
Changing your lender Changing your mortgage to another lender could mean lower monthly payments. There will most likely be some finance left to pay on your mortgage so it would be worth speaking to a competent mortgage broker. Alternatively, the Money advise service has some great free resources which cover this topic. https://www.moneyadviceservice.org.uk/en
Make better use of your time Sometimes cutting back on your expenses is not a feasible plan especially if you are already living below your means. Rather than cutting back, Look into ways you can make better use of your time by earning more money. Over-time at work would be worth asking for. Also, look into any side job vacancies for an additional boost to your monthly take-away.
Look into selling your property
Selling your property whilst going through a repossession is not against the law. We have successfully helped people in the past sell their home before their lenders took possession. Of course, this would all need to be done in advance of a court hearing date as there would be less control of security for a buyer.
It is also important to make sure the buyer is in a position to move quickly and is committed to actually buying your property. Having an efficient proactive conveyancer will be one of the keys to ensuring your sale goes through fast.
If your house is repossessed
At this point, we would advise contacting your local council for some support on your next steps. They will have dealt with many similar cases and likely have a solution to help you get back on your feet.
It may also be worth noting that a lender may still be able to claim money from down the line should you buy and new property and come to selling it.
We have the first-hand experience of dealing with house repossessions and take pride in our swift action in preventing it. If you would like to give us a call for free advice on this subject our lines are always open.
We have a free offer system also which will allow you to make an enquiry for the sale of your house and receive an offer within 48 hours. Click the below link for a free cash offer