How to stop house repossession by talking to your lender
If you are struggling to make your full mortgage repayment, then it is essential that you contact your lender as soon as possible. It may be tempting to ignore your problems and hope a solution will come along, but the sooner you make contact, the sooner your lender can start to help you. If they don’t know your situation, then their options are limited, and repossession becomes much more likely.
“Don’t ignore the problem. The sooner you make contact, the sooner your lender can start to help you”
Lenders want to help, and they have teams of experienced advisors who will understand and sympathise with your situation. After the COVID pandemic, and the cost of living crisis, they know that people are struggling through no fault of their own. They’re not there to judge you or make you feel bad. They’re there to help you understand how to avoid house repossession, and to find a way forward that works for both of you.
How to stop house repossession through renegotiation
There are a number of ways you can negotiate to stop your home being repossessed. These include:
· Negotiate a payment holiday
· Negotiate lower repayments
· Ask to move to an interest-only mortgage
· Restructure your mortgage over a longer term
Payment holidays and lower repayments for a short time may be an effective solution if your situation is temporary. For example if you have suffered an illness or accident, or you have been made redundant and need time to find another job. Once you are back on your feet, you can resume your normal payments, as well as catching up on what you’ve missed.
Moving to an interest-only mortgage will lower your monthly repayments. However, you will need to show your lender how you intend to clear the balance at the end of the term.
How to stop house repossession by reorganising your finances
It is always better to pay at least something to your mortgage lender, even if it’s not the full repayment. If you are looking at how to stop house repossession, you need to sit down and take a close look at your finances, to see where you can make savings.
“You need to show your lender that you are taking your arrears seriously and prioritising your mortgage repayment”
You may be able to reduce your monthly outgoings by cutting back or by negotiating better deals with utility suppliers or insurance companies. This will give you more money to pay to your mortgage lender. You should set out your monthly income and outgoings clearly, and share this with your lender, along with the steps you’ve taken to cut back. This will show them that you are taking your arrears seriously, and that you are prioritising your mortgage repayment.
What help is available to stop repossession?
If you don’t feel confident in talking to your lender, there’s expert help available, free of charge, through debt charities such as Step Change and Citizens’ Advice. They are experienced in talking to lenders, and they know how to negotiate with them, on your behalf, to avoid repossession proceedings.
You are not alone. There’s lots of expert help available free of charge from debt charities.
It may not feel easy to make the call to a debt management charity, but they understand this, and they’ll do all that they can to make you feel comfortable. You need to be honest with them if they’re to help you effectively. Even if you are embarrassed by your circumstances, hiding debts or other problems will not help your cause, and it could work against you in the future.
How to stop house repossession by applying for Breathing Space
If you are struggling with mortgage arrears or other debt, then you can ask for ‘breathing space’. This is a legally mandated sixty-day period in which payment demands and legal action, such as repossession proceedings, are frozen. This will give you time to consider your options and potentially sell your house if you have no other option to clear your debt.
“Breathing Space gives you 60 days to consider your options”
You cannot apply for breathing space directly; a regulated debt advisor must make the application on your behalf. You can’t apply for breathing space if you currently have a debt relief order, an IVA or a bankruptcy order.
When repossession proceedings go to court
If you have not negotiated with your lender, or if they have not responded positively to your proposed solutions, then they may apply to the court for a repossession order. However, this does not automatically mean that you will lose your home. The process takes a considerable time, during which you may be able to find a solution or sell your home yourself to pay off your debt.
Legal repossession proceedings involve several stages:
· 15 days written notice of intention to start court action
· Hearing date is set and documents sent to you
· The hearing takes place and a judgment is made
· You may be able to appeal this judgment, delaying or preventing the repossession
· If repossession is granted, repossession is normally set for 28-56 days later
How to stop house repossession that has gone to court
Depending on how busy your local courts are, it can still be several months between your lender telling you they are starting proceedings and a repossession hearing taking place. During this time you can still try to negotiate with your lender or try to sell your property yourself.
If the case does go to court, you will have the chance to put your proposals to the judge, as well as explaining any other circumstances that may affect your case. You can get free legal support on the day of your hearing through the Housing Possession Court Duty Scheme and could get legal aid if you are on a low income.
You may be able to have any possession order suspended or delayed, as long as you stick to the agreed conditions. The repossession application could be dismissed if there is a fault with the lender’s processes, although this is rare. If you disagree with the judgment, you may be able to appeal the decision in certain circumstances.
How to stop repossession by selling your own home
While your mortgage lender is legally obliged to get the best possible price for your home, there are many advantages of selling it yourself if you can:
· Your sale price may be higher than a ‘distress sale’ by the lender
· You can negotiate lower fees for estate agents and conveyancing
· You can sell sooner, avoiding additional interest and mortgage repayments
· You will not have a repossession registered on your credit file
If your home is in a popular area and is in good, sellable condition, you should be able to sell your home yourself before repossession takes place. If you have secured an offer on your home, you should let your lender know and they may put a hold on any repossession proceedings.
How to stop repossession with a quick house sale
If your local market is quiet, or your home is not likely to sell fast, a traditional sale may not happen fast enough to avoid repossession. If this is the case, then you can consider a fast home sale company. You will not get 100% of the value of your home, but you will get a guaranteed sale in as little as three weeks. This should be fast enough to stop repossession and will give you the peace of mind of sorting out your problems much sooner.
“A quick house sale will avoid repossession and sort out your situation sooner”
If you choose a reputable home buying company, in most cases you should also get your legal fees paid for you, reducing the cost of your sale, while significantly speeding things up. If you wait for repossession, your lender will price your home to sell as fast as possible, so their sale price may end up not being any higher than a quick sale offer.
It’s rarely too late
As you can see, however daunting repossession may seem, it is rarely too late to find a solution. From talking to your lenders and renegotiating your debt, to getting some breathing room and selling your home, there is usually a way to stop repossession, as long as you face your problems and get some help. You may not be able to keep your home, but you can keep control of the process and ensure that you come out of it in the strongest financial position with the minimum damage to your credit rating.