How to stop the repossession of your home

The fear of losing your house is understandable if you’re experiencing financial difficulties. But it’s important to realise there are steps you can take at any stage to get things back under control, including how to stop the repossession of your home.

When you’re struggling with mounting debts and being chased for payments, it can be easy to panic or slip into denial as a way of coping. But if you’re able to stay calm, get support and take action, you can find the right solution to tackle your money issues and potentially retain your home at the same time. 

But if you do need to move on, then at least you’ll be able to improve your financial situation for the future, rather than falling into repossession. You could find you’re still liable for costs, and deemed intentionally homeless meaning you won’t receive any support.

How missed mortgage payments and secured debts can escalate

It’s never too late to start tackling financial problems. But the sooner you start, the easier you will find it, and the smaller harm it will do to your credit rating, living situation, and future prospects.

When you start to make late or missed mortgage payments, this will have an impact on your credit score. But if it’s only on one or two occasions, most lenders will be willing to offer a temporary payment holiday or paying a reduced amount. You might also be able to switch to an interest-only mortgage or extend the current agreement to lower the monthly payments.

A mortgage provider will generally look for a way for you to catch up on payments and arrears as that is more profitable for them than the costly process of a repossession. They also have to follow the Pre-Action Protocol for Mortgage Arrears to ensure you have the time to get advice and find a potential solution before the issue becomes more serious.

This is also typically the case with financing secured against your property. You’ll be contacted about missed payments and they’ll need to explore options for you to get back on track before taking further steps. Unsecured debts such as credit cards or store credit won’t affect your home unless they’re converted into a secured debt following a court action.

If you start to miss three or more payments, this is likely to cause your lender to close your account, known as a default. And at this point, the process will start for a repossession order. This can take up to around a year, but eventually you’ll be required to attend a court hearing. If the judgement is an outright possession order for eviction, you’ll typically need to leave within four weeks. 

How you can tackle financial arrears

As soon as you start experiencing financial problems which mean you might miss mortgage payments, it’s time to start looking at your options. This means contacting specialist debt advice organisations for support (for example Citizens Advice, National Debtline, Shelter, or Stepchange).

They’ll be able to help you organise your finances, particularly around paying priority debts including mortgages, council tax and utilities. They can help you come up with a repayment schedule or debt solution which is manageable in your current situation. Both a Debt Management Plan (DMP) or Individual Voluntary Arrangement (IVA) can help you reduce payments and interest on the amounts you owe to some, or all creditors, although an IVA may mean you’re required to remortgage your home or make extra payments. Other options to reduce or potentially write-off your debts will mean giving up your home, such as declaring bankruptcy

You should contact your lender as soon as possible, to let them know you’re finding a solution, and then get in touch again with your proposed solution as soon as possible (unless it’s being handled by a third party such as Stepchange on your behalf).

Independent specialist debt advisors will recommend whether it’s better to make small regular payments to some, or all, of your creditors. 

Options can also include extending your mortgage term to reduce monthly payments, switch to a new lender or mortgage with better terms, or even taking out finance to consolidate your debts via a second mortgage, repossession loan, or bridging loan if it’s suitable for your individual circumstances. 

The home repossession process

When a lender decides to start repossession proceedings, they will need to notify you. It’s still not too late to work with them and debt advisors to prevent things going further, but you will then be sent a date for your local court hearing and a defence form to complete.

Even when you’re in court, it doesn’t mean you’ll be evicted. The judge could rule for a suspended possession order so that you can either stay in the property long enough to sell, or let you keep your home if you make additional payments. This can be more likely if you’re caring for young children or someone vulnerable due to illness or disability.

You can still try to find an alternative solution even after a repossession order has been issued by a judge. Besides appealing the decision, you could still offer a new financial agreement with your creditors. Alternatively, you could decide to sell your house to recoup more money against your debts, rather than allowing for a repossession. This could let you stay in your home longer while the sale is arranged. 

Don’t be tempted by voluntary home repossession

With the stress and worry about losing your home, it might be tempting to just move out of your property and hand the keys back to the lender, known as voluntary home repossession.

This is very rarely a good decision. While it might seem easy to just walk out, your lender will need to sell your property to recover their costs, and might not wait for the best price. That can leave you with a bigger shortfall still needing to be repaid.

You’ll also be expected to cover all estate agency and management fees, and can continue building up mortgage debts while the house is sold.

Selling quickly to avoid a home repossession

Your financial situation and commitments may mean that your current property just isn’t a viable option. Rather than waiting for a forced repossession or walking out voluntarily, with all the stress and potential ongoing costs, it may be better to sell your home.

Whether it allows you to downsize, or move in with family and friends, it’s worth considering if holding on to your current property is worth the risk of even higher debts or being forced into bankruptcy.

If selling is the right decision for you, then you may need to act quickly. Especially if you’re facing a court hearing or forced repossession. The traditional property market, or even auctions, can move too slowly to sell your home in the time required. But National Homebuyers is able to offer you a fast valuation and cash offer, and potentially a completed sale within just a few days.

We’ll even pay up to £1000 of your legal costs upon completion, subject to exchanging contracts within 30 days of the acceptance of an offer.

After completing the sale of your home, you can have the money in your account in as little as seven days. Which means you can quickly start paying off any outstanding debts and reducing your outgoings. 

If you need to sell your home quickly, talk to a member of our friendly team today on 08000 443 911 or apply online now and we will be in touch.