Stop House Repossession
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We all assume that we will move out of our home as and when we are ready. But what do we do when this decision is taken out of our hands? A lot of people struggle with the cost of owning a home. Property provides one of the biggest financial burdens people face in their lifetime, with many people stretching themselves to be able to afford to put a roof over their heads. The cost doesn’t end when you get the keys either. This is just the ‘end of the beginning’ given the ongoing cost of paying a mortgage and footing the bill for any repairs required.
With this in mind, it’s little surprise that some people struggle to keep up. The Financial Conduct Authority points out that there is more than 15 billion in late mortgage repayments owed in the UK. While this figure has fallen in recent years – especially since the 2008/9 recession – it’s clearly a significant amount. Indeed, more than 80,000 people are in arrears of more than 2.5% of their outstanding balance.
The number of people with mortgage arrears of more than 2.5% of their outstanding balance
2.5%-5%
34,900
5%-7.5%
15,300
7.5%-10%
8,600
10%+
24,500
(source UK finance)
While the idea of having our homes repossessed may never have crossed our minds, we may find ourselves in a situation beyond our control, such as an unexpected change in financial circumstances, which means we are suddenly faced with this incredibly stressful situation.
With 1.4 million UK households struggling to pay their mortgage, house repossession is a harsh reality for some. However, there are alternative options…
House repossession process
If you fall behind on your mortgage repayments your lender will inform you of your mortgage arrears. This is how much money you currently owe them. Remaining calm and communicating with your mortgage provider will often stop the repossession process there and then, with many lenders giving time frames and alternative payment plans to help you take control of your situation.
If you fail to get in contact with your lender they will file for a repossession order; this means that the courts have decided your mortgage provider can repossess your home. You will be required to attend a court hearing where you can voice your case to a judge. Often, solutions to stop repossession orders can take place at this point.
If the court decided that repossession is the best option you will be provided with a date you must leave your property. If you fail to do so bailiffs will be sent to your home to remove you. Your mortgage lender will then sell your home and return any remaining funds to you.
However, house repossession doesn’t need to be the answer.
Are you currently trying to avoid having your home repossessed? Then get in touch and see how we can help you. There are NO FEES and NO HIDDEN CHARGES with our services.
How to avoid house repossession
Most people are aware if they are not keeping up with their mortgage payments and it doesn’t take a notification from your lender for the panic to set in. Whether you have received a letter or not, get in touch with your lender as soon as possible; communication is key.
In the third quarter of 2017 there were 1,900 home repossessions in the UK.
How to stop repossession
Speak to your lender. Mortgage lenders aren’t out to get you. You are a customer and they will often be keen to find a solution for you if you are upfront and honest. They are human too and will be sympathetic to your case.
As soon as you suspect you might be in trouble with your mortgage lender, you should talk to them. Don’t be afraid – honesty is the best policy here. Remember, they want to be able to recover their money so it is definitely in their interest to try to establish realistic payment terms that you will be able to stick to.
It might well help you to do a little bit of preparation before you contact your mortgage lender. If you can show you have a sound budget plan and make them an offer of what you can pay, you’ll show that you’re a responsible borrower and are keen to fulfil your responsibility.
Solutions could include any of the following:
However, if you would prefer to get out of arrears with your provider you have the following options:
Customer Reviews
Overpaying your mortgage to avoid repossession
For many, their mortgage allows them to pay a little more than the set amount each month (often this is 10% a year, although each provider may have slightly different rules so you must check). This process of ‘overpaying’ can come in very handy if your circumstances change in the future, as it allows you to build up some extra equity in the property you own and also earn some brownie points with your lender. If, for example, you were to lose your job and struggle to make your repayments, this extra funding buffer can really help.
You won’t pay interest on overpayments and you might well find that your money ‘works harder for you’ by paying more off your mortgage, rather than sitting in a savings account with a low interest rate.
Overpaying £50 a month on a £150,000 25-year 4% mortgage would help you pay this off more than two years earlier.
Mortgage insurance policies
It’s impossible to predict what will happen in your life over a 25 or 30 year period, which is why it’s tough to commit to a mortgage and know that you’ll be able to make the repayments. This is why many people choose to take out insurance policies. It’s not nice to think about, but people in a couple need to consider what might happen to their partner if they were to die, or to both of them if they were to suffer a serious injury that would prevent them from working.
Your house is an expensive asset so it’s worth protecting. It is possible to get policies that can pay out in case of loss of life, illness or even a drop in income.
Only half of mortgage holders have five cover. Fewer than a fifth (17%) have critical illness cover and fewer than one in ten (7%) have income protection.
Combat all your debts
When times are good, it’s easy to get carried away. The cost of borrowing has been low in recent years, making it cost effective for people to take out loans and credit cards to make big ticket purchases. However, while this can be manageable, a change in your circumstances could soon alter the picture. Losing your job, for example, could easily mean that this sort of debt weighs heavily on your shoulders and affects your ability to pay your mortgage.
The Bank of England recently raised concerns about credit card debt, which accounts for 70 billion of the UK’s 200 billion of personal debt. Alarmingly, nine of every £10 of outstanding credit card debt in November 2016 was owed by people who were in the red two years earlier, implying that a significant number of people are stuck in long-term debt.
It’s important, therefore, to focus on tackling your debts as soon as possible to avoid these creating or adding to problems down the line. Avoid just paying the ‘minimum repayments’ on your credit card, as this will not chip away at your debt (even just a few pounds more can make a difference) and prioritise clearing old debts before taking on new spending.
The top reasons people put off budgeting
31%
Find it boring
19%
Lack of time
11%
Lack of confidence in money related decisions
10%
Prefer not to know
8%
Find it difficult
(source Money Advice Service)
Don't be ashamed to claim
Many people fall into financial hardship if they lose their job and when it comes to this, and other times of hardship, you might well be able to call on the welfare state to help.
Some people feel nervous or embarrassed about claiming benefits but it’s important to stress that there’s no need to feel like this. Such support exists to help people in tough situations and can be the difference between a financial struggle and a disaster. If nothing else, the welfare system might stop you from having to raid every last penny of savings, which leaves you prone to further problems down the line.
Talk to a financial expert
It’s also important to recognise that there is help at hand if you feel you are losing control of your finances. Free and impartial legal advice is given by trained advisers at bodies such as Shelter or the Citizens Advice Bureau. These charity bodies are experienced in helping customers to find the information and support they need. Other examples of organisations helping with this are PayPlan, StepChange and the Debt Advice Foundation. These bodies can offer over-the-phone advice and often have useful guides and resources freely available online for you to read and use.
Stop repossession now
If you are currently trying to avoid having your home repossessed get in touch with us today. We are here to help and offer a no fee solution for anyone who is facing repossession, as well as free advice to those with mortgage difficulties.
So, if you need to stop the repossession of your home, simply fill in our enquiry form and we will be in touch to help you resolve the problem quickly and easily.
Citizens Advice Bureau advisers dealt with more than 1.5 million queries about debt in the 12 months to the end of January 2018. 57.9% of the CAB’s queries in this period were about either debt or benefits and tax credits.
House repossession process FAQs
If you’re facing repossession and looking for a way to avoid this, 123 direct can step in and purchase your property for cash, which would stop the repossession from taking place. How this works, is that the cash we pay you will cover what you owe the bank – as long as our cash offer is greater than the amount you owe on the mortgage and any arrears. From the moment you contact us we can act very quickly to purchase your property and stop repossession from happening; our quickest turnaround time from initial contact to completion is just 7 days. However, you should always contact us as early as possible, as delays can be caused by unforeseen factors.
Buyers are going to be attracted to flats with longer leases. If you’re trying to sell a flat with a lease under 99 years you will be asked to extend it, and this comes at a cost to you. Some mortgage lenders won’t offer mortgages on flats with leases under 80 years so it is likely a potential buyer could be put off if your lease isn’t over the desired threshold.
When it comes to a short lease it can be difficult to sell our flat quickly on the open market. Fortunately, 123 direct can guarantee you a sale. We offer a cash house buyer service; this means we buy your flat from your (or any property) using our own cash funds. You won’t pay a penny in fees, and we will even cover your legal costs.
Interested? Get a cash offer for your flat today and start the process of selling your flat.
When you receive a CCJ (County Court Judgement) you have 30 days to pay off the balance you owe before your home will be repossessed. If you have received a CCJ and have no other means by which to pay what you owe, you should get in touch with 123 direct right away.
Getting in touch with us sooner rather than later will mean that you have more breathing space and don’t have to deal with the stress of stopping the repossession in a very short time frame. Whilst we are able to complete in as little as 7 days, in cases such as these we would always recommend that you come to us as soon as possible.
Yes, we can. To stop a CCJ you need to pay back the amount you owe within 30 days of receiving it. As 123 direct are able to step in and purchase your property for cash, you can pay back your lender within that timeframe and stop the CCJ from being entered onto your credit record at the Register of Judgements, Orders and Fines.
Yes. To help during this difficult time, we are happy to offer a grace period in which you can continue to live in the property rent free for a period of time, once the property has been purchased by us.
On a longer term basis, we typically will look to sell on any property we purchase. However, in some cases we will rent the property out – depending on what the rental market is like in the area. If you would like to remain in the property 123 direct purchase from you as a tenant, make sure to discuss this with your dedicated agent during your initial phone call. They will then assess whether this is possible and if so will work to make it happen for you.
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