House Repossession: The Facts | Get FREE help Selling Your Property!

House Repossession: The Facts!

Could my house be repossessed?

Credit card debt is unlikely to threaten your home but falling into arrears on your mortgage or a secured loan could result in your home being repossessed. If you fall behind in mortgage repayments by just three months your mortgage company could take action to reclaim your house.

How do I know if my house is being repossessed?

Before you are called to court you will receive several letters informing you that you are behind in your mortgage repayments. These will ask you to contact them to explain and remedy the situation. If you don’t reply you will be sent another letter threatening legal action. If you ignore the third and final warning, court proceedings to repossess your house will begin without further notice. You will receive notification in the post from your lender containing details of your court hearing, a description of the property, the details of your mortgage, the state of your account and what the lender is seeking. Bear in mind that most mortgage lenders don’t want to repossess your home, it is a lengthy, expensive process and it creates bad publicity, but if they aren’t getting paid the situation cannot just be ignored.

What can I do if my house is being repossessed?

If things have got to this stage you will also receive a form of defence (N11M) in the letter above. In this letter you can explain your circumstances, be honest about why you have fallen into arrears, what you can do to resolve the situation and how much you can afford to pay. The whole process of repossession takes around 6 months, in this time you should speak to your lender and try to negotiate a deal. You can stop the process at any time by coming to a solution; this could be to pay off your arrears, if you can, or remortgaging or selling your home. The sooner that action is taken the less likely you are to be black-listed for future mortgage lending.

Do I have to attend the court hearing?

A court hearing can be daunting but in reality there will only be a district judge and a solicitor from your lender present. This gives you a further chance to explain your situation and talk through what you see as a solution. In fact there is the added benefit that if the district judge sympathises with your situation and thinks your offer of action is reasonable he or she could grant you a suspended possession order which would allow you to stay in your house whilst you slowly pay of your arrears.

What can I do if I can’t afford my mortgage?

Sometimes you could slip up because of a temporarily blip, a particularly expensive few months or a change in employment, however in other circumstances your reduced income could be a more permanent situation, then you have several options. You could remortgage to an interest-only mortgage, or you could consider selling your home and downsizing. One of the big problems is that the repossessed house may not sell for its true worth. If you take control of the situation yourself, for example by using a quick-sell company, you are in control of what offers you receive and accept and can pay off your outstanding debt whilst still receiving any equity left over in cash.

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