Nobody wants to be in a situation where they can’t pay their bills. Especially if your bank or lender has a financial stake on your home through a mortgage.
But unfortunately, sometimes things happen that are out of our control. Maybe you have recently lost your job, or have had sudden care duties thrust upon you that mean your finances are stretched thinner more than usual.
If you are unable to pay your bills yet want to stop house repossession and the negative repercussions that come along with it then carry on reading for some ideas of potential steps that you can take, one of which involving our home cash buyers service.
What is repossession of property?
In terms of property, repossession is when you lose your home because you could not keep up with the mortgage payments. Your mortgage lender will seek permission from the court to remove you from the property and then sell the property to clear your debt.
It is not just your home that can be repossessed if you fall into arrears on making payments for goods that another party has a financial stake in. A more complete list can be found here.
If your home has been repossessed, then this can have a drastic effect on your credit score and limit your ability to apply for a mortgage in the future.
Property repossession process
Property repossession is supposed to be a last resort that your mortgage lender can take if you fall behind in payments. They will first contact you to let you know that you have entered arrears with a total amount that you owe and ask that you make any outstanding payments.
If you do not respond and do not make a payment, then your lender may begin the process of repossession by starting court action. You must be informed of this at least five working days before court action begins.
Once court action begins you will be sent a number of documents including, most notably, a notice of possession hearing along with claim and defence forms. You should attend the possession hearing if you want to have the best chance of keeping your home.
Following the hearing, your judge will decide on how to proceed. If your lender has succeeded in court then the judge will enact a repossession order. With an outright possession order, you will have to leave the property on a set date. With a suspended order, you may remain in the property provided that you follow terms that are set in the suspended order.
If you are successful in court, then the judge can set aside or adjourn the repossession.
Ways to stop repossession
The best way to stop your home from being repossessed is to communicate with your lender as soon as you encounter difficulties that are going to impact your ability to make payments.
If you can show your lender that you are attempting to rectify the issue and how you are going to do so, then they may be able to accommodate your requests and keep you in your home without needing to chase repossession.
Beyond this, then there are a few other routes that you can take to stop repossession.
If you want to suspend the repossession process to allow you more time living in your home while you work out a plan to make payments, then you can fill out the court application form N244.
You should include as much information as possible that may be useful to defend your case in court. You will still have to attend court, but the delayed date may allow you time to get back on your feet.
Voluntary repossession of a house in the UK means surrendering the property to your lender before you are ordered to evict by the court. If you have somewhere to live lined up then you may be considering this option.
While doing this may save you time, stress, and some money that comes with paying court fees, at the end of the day you will still be evicted and this will have an impact on your credit score.
Sell your home
Another option is to sell your home to pay off your debt to your mortgage lender. While you may lose your home, you will be in a much better position than if your home were to be repossessed.
Your credit score will not be impacted as you will be able to clear all of your debts before repossession, provided that the sale is of a sufficient value.
You can then take this opportunity to thinking about downsizing home to a property where your bills and outgoings will be lower, if applicable.
Need to sell your home fast?
Once the repossession process begins, time can move really quickly. Especially considering that interest applies to any overdue payments.
If you have decided that selling your home to pay off your debt is the best option, then consider getting in touch with a property buyer, such as us at Easy Sale, to buy your property for up-front cash.
This process is not limited to residential homeowners either. If you a buy-to-let mortgage holder and you are caught with unruly tenants who refuse to pay, leaving you behind on your own mortgage payments, then you may also want to consider selling your property for cash.
Whatever situation you are in, Easy Sale will be there to offer you a great price for your property that you will be happy with. Get in touch with us as soon as possible for a quote.
What happens if my house is repossessed?
If your house is repossessed and there is no way for you to suspend the possession order, then you will have to leave the premises and the property will be sold to pay off your mortgage and clear your debts.
You will be contacted by your local county court who will offer you advice if you are set to become homeless.
If your house sale does not clear what you owe (known as a shortfall debt) after your house repossession and you are chased for debt then you may be able to negotiate a payment plan with your lender so that you can clear your remaining debt with realistic payments.
There is also the slim chance that your debt could become statute barred. The time limit for a statue barred debt in England is 6 years from the last time you acknowledged your debt or were in contact with your lender, upon which your debt will become unenforceable.
Can I stop my mortgage payments?
Usually no, you cannot stop making mortgage payments if you have not cleared your mortgage. However, there may be options to temporarily pause or reduce payments if your lender allows mortgage payment holidays.
How long after a repo can I buy a house?
If your house has been repossessed then you will likely struggle to be accepted for a mortgage in the future, especially the near future (up to three years).
You may stand more of a chance at being accepted for a mortgage if there has been at least three years since your repossession and if you have a high deposit, yet it will ultimately be influenced by the amount of debt you owed upon repossession and the amount that you want to borrow in the future.
Your success at applying will also vary from lender to lender.
Does a bank need a high court writ to repossess?
No, your lender does not necessarily need to involve the high court to repossess your house. It will, however, need to involve your local county court unless you opt for voluntary repossession before the courts are involved at all.