Repossession Help

Rising debt and falling into mortgage arrears is a scary prospect but it could happen to anyone, especially in today’s economic climate. If you run into problems it is important to stay focused, seek independent advice as soon as possible and remedy the situation with a practical and viable solution.

Should I ask my mortgage lender to help me?

Yes. If you are falling into mortgage arrears the best way to avoid repossession is to speak to your lender as soon as possible. Explain your financial situation clearly and truthfully and try and negotiate a deal which would allow you to pay as much as you can afford whilst still keeping your home.

What could my mortgage lender offer to help me out of arrears?

In reality mortgage lenders don’t like to repossess homes, it is a lengthy, drawn out process and no one comes out the winner. If they can see a solution and a way of helping you they will. They could allow you to take a temporary payment holiday or current arrears could be added to your mortgage loan, this is called ‘capitalising’ your arrears. Your mortgage lender could also agree to extend your mortgage term – your monthly repayments will be reduced but the length of your mortgage will be increased. You will have to pay more in the long run if you choose this option but it could make life more affordable.

Can the Government help me if I am facing repossession?

Yes. The Government has developed the Homeowners Mortgage Support scheme in order to help homeowners who are failing to meet their monthly mortgage payments. This is designed to help people who have suffered a temporary drop in income for example through redundancy or compulsory reduced hours. The scheme allows homeowners to reduce the amount of interest they are paying on their mortgage for up to two years, thus reducing their monthly outgoings.

Can I avoid repossession by selling my house or renting?

If the drop in your income is permanent remortgaging may be more expensive in the long run and you may wish to consider moving. You could rent out your current property to pay off its mortgage and rent somewhere else cheaper, you could rent out a room in your home to increase your income or you could sell your house to pay off the debt that you owe and move elsewhere.

Repossession help – when things go to court

If the situation is not resolved and you get taken to court it is important to turn up to your hearing, even if you feel that your case is hopeless, you may be able to save your home if the judge is sympathetic and an agreement can be arranged. Seek legal advice before going to court to help you prepare and look at your finances in detail, there may be a solution that you have overlooked. When you do have to go to court turn up early and bring all the relevant documents with you so that you can explain your situation and have proof of what you can and can’t afford to pay.

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