If you’ve been threatened with repossession, you might be worried there’s little you can do except prepare for eviction. Stories of repossessions increasing certainly don’t help — at a rate so rapid that a home is repossessed every 94 minutes in the UK.
Fortunately, if you’ve fallen behind on your mortgage payments, a repossession won’t happen overnight. If you’re wondering how to save your house from repossession, here are the steps you can take.
What Is Repossession?
Before we cover the ways you can save your home from being repossessed, we first need to cover what repossession is.
If a homeowner misses a mortgage repayment date, they are behind — or in arrears. While you should never make it a habit to be late with your mortgage payments, most lenders allow a 15-day grace period before contacting you to find out what the problem is. If you make your payment during this time, usually, no further action will be taken and you won’t be penalised.
However, if you cannot make your mortgage payment, your lender may escalate the situation. You might be able to agree on a short-term repayment plan with your lender while you get your finances back in order, but if your circumstances are unlikely to improve, your lender can pursue repossession of the property as a last resort.
Saving Your House from Repossession When You’re in Arrears
Being late on your mortgage payments can leave you in a scary place, but it’s important to remember that repossessing your property is not something your bank or lender wants to do, and in many cases, they’ll be happy to work with you to resolve the matter.
Talk to Your Lender
Being open and honest is always the first step. It can be tempting to ignore the phone calls and toss the unopened letters aside, but the longer you leave it, the worse the situation will get and the harder you’ll have to work to find a solution.
As soon as you miss a mortgage payment, whether you are in the process of your home being repossessed or not, contact your lender. Tell them why you’re in arrears and that you’re making an effort to clear them. It can also help to explain that you’ll send them a repayment proposal, which acts as a show of good faith and demonstrates that you are taking steps to come up with a course of action that works for all parties.
You can start talking to your lender even if they’ve already started court action, but be aware that if you reach an agreement, you must still attend court and explain this to the judge.
Important note: If you’re at risk of repossession and your lender has taken you to court, they will not be able to evict you due to coronavirus. This applies if any part of the process falls within the 90 days, or three months, after 27 March 2020, as all court action for repossession is suspended during this time.
You can also ask for a three-month payment holiday if you’re struggling to meet your mortgage repayments because of coronavirus. In this case, the missed payments will be added to the total of your mortgage owed, so be aware that your monthly repayments may increase after the payment holiday.
Work Out a Repayment Plan
Working out a repayment plan with your bank or lender can go a long way to show you’re reliable and build trust with them. If you can’t pay your full monthly instalment, or the total of your arrears, it’s still better to pay something, even if it’s just a small but regular payment. Before making a proposal, look at your income and outgoings, making sure you prioritise your mortgage, debts and essentials, to work out how much you can realistically offer.
Having a repayment plan can save your house from being repossessed and lessen the blow on your credit rating, but not being able to keep up with your arranged payments can deteriorate the relationship with your lender beyond the point of repair.
Getting rid of the nice-to-haves, such as subscriptions, and swapping to cheaper brands and contracts — even temporarily — can free up a healthy amount each month to help you get into the black.
Consider Selling Your Home
You shouldn’t reject the option of selling your home if you’re in arrears. This is worth considering if the selling price can cover the costs of your mortgage and arrears while leaving you with some money left over. This will allow you to get out of arrears and save your house from repossession, which will also mean it won’t impact your credit score.
But selling your home can be tedious and there’s no guarantee that your house will sell. When you’re looking to save your home from repossession, time is of the essence, and many drawn-out months waiting for an offer may mean more missed payments. At House Buyer Bureau, we can guarantee a quick cash sale of around 80% of your home’s market value. As we can sell your house in as little as seven days, you can be debt-free, fast.
What Not to Do
When faced with losing your home, you might consider putting your head in the sand and delaying taking action. The reality is that repossession can be a scary and worrying situation, especially if you have a family to provide for. But there are ways to save your house from being repossessed, and the sooner you move towards making a missed payment, however small, the less likely you will face legal action. The first step is to open the lines of communication with your bank or lender and be honest and upfront about your arrears.
If you’re late on your mortgage payments and wondering how to save your house from repossession, you have several options. If selling your home is something you’re considering, House Buyer Bureau can guarantee the best cash offer on the market.